Triple Win Property Management Blog

Residents looking at lease renewal documents

How to Craft a Lease Renewal Letter That Wows Your Residents [Free Template]

What if we told you it's possible to craft a lease renewal letter that makes everyone happy – even when you raise the rent? That’s right! It’s absolutely possible, and it’s all about positioning. How do you choose pricing? How do you then position and present your lease renewal offer? How do you do this in a way that promotes clarity, builds trust, and drives the business results you’re after? That’s what we’re covering in today’s topic: Crafting a lease renewal letter. We’ll dig into what it is, what you should include, and why an effective letter is so important for all stakeholders. We’ll also provide an example and a template you can use yourself. Related: Notice to Vacate Tenant Free Template What is a lease renewal letter? A lease renewal letter is a document sent by a landlord or a property manager to notify residents that their lease is nearing its end, and to present the terms of a new lease or simply give the option to renew. It should be sent to tenants at least 60-90 days before the lease’s expiration date to give them advance notice of changes and enough time to make their own decisions. Your lease renewal notice should give residents a clear understanding of the timeline and their options and ideally make it easy for them to renew their lease – if that’s what you and the investor want. If you don’t want to renew or are pursuing an eviction, you will follow a different process. What does a lease renewal letter include? At its most basic, a lease renewal letter is just a statement of the ending of an old lease and the beginning of a new one. But a really successful letter should do more than that. The goal of a lease renewal letter should be to present any changes in a way that makes it clear to the resident why those changes are happening, and how it can be a benefit to all parties. It should smooth out the transition and position the renewal in a way that – as we said above – promotes clarity, builds trust, and drives the business results you’re after. Are you raising rent this year? (You probably should be increasing rent each year, according to the market.) How can you position this change in a way that satisfies your investors and your residents? One example is to include a clear comparison of the cost of moving vs. renewing. Another great way to position those changes is to outline resident benefits that are included in the lease. A resident benefits package can drive unique value for residents to renew. These are all important considerations in framing the letter. With that in mind, here are the practical components of a lease renewal letter: Personalization Like any formal document, you should include your name and address, and the resident’s full name and the property address at the top. Also, put the date the letter is being sent. This is important for your records, but also to demonstrate respect and professionalism in the document. Lease expiration date Start with a clear statement that their current lease is coming to a close and include the exact expiration date of their current lease. New lease terms Outline the new lease agreement and terms of the lease, including the duration of the renewed lease. The resident should be able to read the letter and understand exactly what is changing from the original lease. Your goal is to help them make an informed decision based on those changes. Description of the benefits included with the lease If you’re offering something like a Resident Benefits Package, the lease renewal letter is a great opportunity to remind residents of those benefits. Concisely and clearly outlining the value they get from the RBP is a great way to position yourself for success in the next year. The lease renewal letter is also an excellent opportunity to introduce a resident benefits package if it’s new to your residents. Outline the valuable benefits and how it will drive better quality of life, improve financial stability, and even cut long-term costs for your residents. Rent increase (if applicable) Another part of the new lease terms might be a rent increase. The amount of a rental increase should be based on the market in your area. In this section, it’s extra important to add context for the resident. Include the estimated cost of moving, the market trends, and other factors that go into the rent increase. Help them understand that you’re not fleecing them! Give enough clear context to explain that the increase ensures that you and the investor can afford to continue to offer the high-quality home and benefits they’ve become accustomed to. A Note about Rent Increases: This is a tricky subject for a lot of property managers. For self-managing landlords, sometimes the topic of increasing rent can feel daunting. After all, what if the resident doesn’t like the increase and decides to move? That’s a lot of cost and effort for turnaround if you just have one rental property to manage and it’s not your full-time job. The problem, though, is that if you’re not incrementally increasing rent, one day, you’ll discover a big gap between your rental price and the market price. Then you’re faced with an even messier situation of bumping up the price by a lot. Even among professional property managers, this question can get tricky. Some people just raise the rent by an arbitrary amount. However, the ideal approach is to evaluate the market in your area and ensure that your properties are in line with that pricing. Why is a lease renewal letter important for tenants and landlords? Remember, we’re aiming to provide clarity, build trust, and drive business results. A letter at the outset of a new lease can do all three of these things. For tenants in a property, a lease renewal letter helps set out all the factors they need to consider when making a decision for their coming year. It helps reduce disruptions in their living situation and sets them up for success and satisfaction in their next lease term. For the real estate investor, a renewal letter is critical to achieving any necessary new agreements, rent increases, etc. A well-composed letter will help reduce turnover (and thus turnover costs) and increase satisfaction. And, for a property management company, a lease renewal letter gets everyone on the same page, ensures consistent rental income, and can position a new lease as a triple win for residents, investors, and property managers. Lease renewal letter template and how to customize it Here's how to customize the template for your own use: Date and contact information Since this is a legal document, include the date and your contact information at the top. Below that, include the current tenant’s name and the address of the property in question. Make sure to personalize the salutation as well, such as: “Dear [Tenant First Name] [Tenant Last Name].” Friendly introduction and framing Write a friendly greeting that establishes the value they provide to you. This, of course, can be tweaked for different residents, depending on your experience with them. But an example is that you can thank them for being wonderful tenants and explain that this letter is to make the renewal process as easy and frictionless as possible for them. Then, to frame what's coming, explain that your company aims to make their resident experience the best it can be and list a few of the updates you're making to services or benefits, or simply review what you've been offering. Key details about lease expiration Clearly outline the end of their current lease term with the lease end date. You can include reminders on what was included with that existing lease and explain that you are happy to renew with them for another year (or whatever lease term you want). Terms and conditions of the new lease Next, clearly outline the terms and conditions of the new lease. What is the duration of the lease? Has anything changed in what the residents are agreeing to? This is where you’ll also include any rent increases. You can customize this for your area, but it’s good to address resident expectations here. Give context on the cost of a move and the changing cost of property/maintenance/rentals/etc. in your market, and how that affects the changes in rent amount. Next steps for the resident Explain what you need next from the resident. Typically, all you need is for them to sign the letter and return it to you. Let them know how they can reach you with questions or requests. Signature Sign off with a friendly goodbye and include your signature along with your printed name and the date again. Next steps after sending a lease renewal letter Okay, so you’ve sent your brilliantly crafted, perfectly positioned lease renewal letter. What’s next? Well, the resident may simply sign on the dotted line and send it back. Or they may have questions, requests, or negotiations. The third option is they may let you know they don’t intend to renew. Here’s how to deal with those scenarios. Consider tenant requests It’s completely reasonable to expect that some residents will have questions about the letter or may even contact you with requests to make changes to the new lease terms. Property managers should be prepared to field those requests, be open-minded to reasonable ones, but also be ready to explain if a request can’t be accommodated. Showing some flexibility is a great way to get resident buy-in, but ultimately the decision isn’t always up to you. Be ready again with context and positioning to explain the changes in a positive way. You made the changes to benefit everyone, so make that clear when communicating with residents. What to do if a tenant declines You have different options if a tenant declines to agree to the new terms. You could change the tenant’s lease terms, transition to month-to-month, etc. Or, you can proceed with a non-renewal and prepare the property for listing and getting a new resident. This should trigger your team’s move-out processes. Request a written notice of the resident’s intent, establish a move-out date and move-out instructions, including what will happen with the security deposit. Then, your team will want to begin the process of marketing for a new tenant. Legal considerations Lease renewals must comply with state and local laws, avoid discrimination, and be clear about the rights and responsibilities of both parties. If you are terminating a lease in a state that requires a “just cause,” you need to provide a legitimate reason for not renewing the lease. The key is to know the requirements in your jurisdiction. It’s also a good idea to have a lawyer review your lease renewal template before you make it standard across your properties. Final thoughts When it comes time to renew a lease, you have a unique opportunity for positioning with your residents. A lease renewal letter is your chance to reconnect on terms, update expectations, increase rent if needed, and more. And the way you compose that letter – and the way you position the changes – can make all the difference in your renewal rate and resident satisfaction. It’s also the perfect opportunity to introduce a Resident Benefits Package and remind residents how your role is to add value to their living situation. Use our guide above to ensure your lease renewal notice is clear, helps build trust, and helps drive business outcomes for you and your investor clients.

January 9, 2024

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6 Reasons Property Managers Should Choose Clients Carefully and Why

Finding the right property management clients can make or break your business. Experienced property managers often declare this with vigor: “Be very specific and selective about who your customers are.” A simple idea, yet one that can feel tricky to execute. And like many things, there is no one-perfect-strategy-fits-all here. The right action plan likely depends on your situation. So here are six next-layer ideas that might help. 1. Push up or push out toxic property management clients Ok, let’s say you’ve made that grit-your-teeth, pain-in-the-keester client list. What’s next? Sure, you could just politely fire them. And if nothing is stopping you, then nothing is stopping you. But there’s another approach that doesn’t torpedo all your revenue all at once: raise prices. Some will leave. Great. Some will stay and pay. This makes it easier to afford resources that mitigate the distraction. You can keep doing this until the premium is worth it or they’ve parted ways. 2. When the exact opposite advice might work best (for a stage) Let’s say you haven’t been at this for years. You’re newer, just starting out. Being super specific about a customer this early could work. But it also could be the right advice at the wrong time. Yes, you could say you’re only working with class-A, single-family rentals with intentional investors who have 2-20 units and don’t live in your market. Yet, while you have a specific idea, the reality is that it usually takes time and hard work to hone your business to actually deliver a service distinctly for this customer. And after getting some reps in, you may learn that you have strengths and competencies naturally built for a different investor profile, a different asset type, etc. Or, you discover a new market opportunity you didn’t see before. I heard an analogy once that early on, you try a wider net. The net pulls up all kinds of fish. Grouper, tuna, mahi, probably seaweed too. Then you start to realize which one you’re really a match for. And you start adjusting your net and where you fish, just for tuna. Or, you realize you want a different net tailor-made for shrimp or crab. Doing this for months can be a good way of learning through doing what’s good and bad. What complexities do you want to take on, and which do you want to avoid? But be sure you do start tightening the net eventually. The suffering comes from not monitoring and tightening when you’re ready. This wide net approach not being time- or stage-bound turns a thoughtful trade-off into the drag weight everyone warns against. 3. Powerful team incentives Maybe you’re in the owner's seat, less involved in the day-to-day. It’s your team that’s bringing new clients on, and they’re responsible for handling good and bad-fit customers. So, let’s say you want to drop bad clients because they’re keeping you from the next level, but you’ve invested in staff and need to replace the revenue. Raising prices is one way. But here’s another: For every 2-4 good-fit clients the team adds, they get to drop one bad-fit client. It may feel good to fire bad clients all at once, right away. But if the business is in the investment or break-even stage, tying it to replacement clients can be a responsible way to mitigate risk to cash flow. This approach motivates the team to not just find any new client or just the ”easy” client. It focuses them on the most valuable clients. And as more are brought in, you can responsibly filter out the worst fits. Empowering employees to improve their own experience at work by putting clear guardrails in place can be a powerful motivator for change. They now have a productive path that gives them agency, as opposed to feeling hopelessly stuck with a bad client until one of them leaves. Perhaps commission changes for better-fit clients are a worthy consideration. A great incentive structure is usually marked by whether or not people “game it.” And your business still wins. That’s a good segue to… 4. Shift your marketing and sales You can address the existing client base, but if your acquisition strategy never changes, they will keep coming in. So, how do you get upstream of the problem in your sales and marketing? Great marketing attracts who you are for and repels who you are not. Help your team understand both the ideal profile AND the anti-profile. Green flags and red flags. And it’s not just about what you’re messaging, it also can tie to where you find clients and invest in acquisition channels. Ask yourself: Do your best-fit customers come from realtor referrals? Client referrals? Which realtors or clients? Do they come inbound from your content marketing? Instead of spreading your budget all around, focus resources on places and programs that attract your best customers and tighten up less reliable channels. This doesn’t have the immediacy of other approaches, but the impact over time can be significant. The same applies to sales. Great sales processes quickly qualify out vs. wasting time with poor-fit prospects. And they prioritize the Glen Garry leads. Even a simple A-B-C grading with entry and exit criteria is a great place to start. When tracking marketing and sales KPIs as blended, it treats all activity as equal. Reality is different. Some leads are 20%-1000% more valuable. Putting policies and processes in place to prioritize and treat them appropriately is a win. 5. Is it possible to be too specific? Most property managers say they once worried about being too specific with ideal client profiles but then were surprised that the problem was almost always in not being more specific. Well, it’s a balance. Here’s an example description: “We work with rental property owners who want a more passive experience in real estate.” That’s very broad. This sounds like a sea of other companies trying to win the same customer. That makes it harder to pick you. How about his: “We work with Cincinnati SFR owners who are full-time OB/GYNs and want to hold for at least a full market cycle.” Ok, this is much more specific. Probably in ways that don’t really matter. For example: Why OBs vs. doctors in general? Or doctors vs. busy, high-income professionals? Do they really have different problems that would materially change your offering or go-to-market? But let’s stick with it, for example’s sake. Your messaging could definitely sound like nobody else. Let’s say it did work more efficiently, and you win 40% of leads instead of 25% with this targeting. I asked Perplexity AI (replacing Google search for me) how many OB/GYNs there are in Cincy. It’s 322 or 478, depending on the source. Let’s say 200 own or would invest in real estate. Some number less for just single-family rentals. Some already have a PM and are happy. How many are willing and want to hold for a full market cycle? This is likely not a viable business strategy for a dedicated PM business. It’s too specific a pool, and growth will likely be too slow even if you close 50% of leads. 50% of 100 is a lot less than 25% of 10,000. So, it helps to think about the tension between the size of the prize (market opportunity) and the opportunity to design and earn a distinct position in it (differentiation strategy). Thinking about both sides can help you find a sweet spot to commit to and focus on organizing around. If you map your market, you can ask and answer: What’s the smallest niche of the market that supports your business goals and model? What’s the biggest opportunity you can credibly develop and win in the near term? How might you expand as you win to keep growing toward your ultimate vision? You can see how a couple of years later, you can expand or add an adjacent customer profile (accidental landlords, new location, new property type, etc.) or adjacent new services (RBP, brokerage, in-house maintenance, etc.) to add dollars to the same customer base to grow. 6. Focus on wallet-share vs. market share Ok, so what if you want to remove problem clients but don’t want to raise prices, risk cash burn, wait until the team can add better replacement property management clients first, or test changes in your funnel or team’s comp? You might feel stuck, but there’s another way to add the revenue and profit you need to confidently pull the trigger without investing more in acquisition or relying on efficiency improvements to justify it. That’s adding more revenue per unit in a way that increases your customer lifetime value. If your ancillary revenue and profit per unit go up, you can afford to let clients go without risking churn. Second Nature helps property managers do this through a fully managed resident benefits package. Industry benchmarking studies show the average PMC profits $10-17/mo per unit. Every lease with an RBP can replace the profits at risk or more. And RBP isn’t the only ancillary revenue opportunity. Pet rent is another good example if you haven’t implemented it yet, amongst others. What are your thoughts? The goal of this article is not to be prescriptive; it’s to spark thinking about key considerations and paths to get there. To that end, did you find this content useful? Anything you can add that’s missing? Connect with us in our Facebook group or get in touch! We’d love to hear your input.

January 4, 2024

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What is Rent Guarantee Insurance? Limitations & Top Providers

Ah, rent. It's the financial fuel that keeps rental properties rolling. But what happens when that fuel line gets clogged? Even if a resident comes with a great payment history and credit, life happens. Maybe it’s a job loss, an economic slump, or even identity theft – whatever the reason, most property managers will experience lapsed rent payments at some point. For property managers, stalled rent means your clients’ property is suddenly a financial risk rather than the asset it should be. Enter a new(ish) solution that provides a safety net for property managers and owners: rent guarantee insurance. Think of it as a stopgap for your investors in case of missed rent, leaving them financially secure while you can take your next steps thoughtfully. Rent guarantee insurance is an owner benefit that many savvy property managers have begun to include in their suite of services to entice new investor clients. So, let's break down the rent guarantee magic. In this blog post, we'll be your tour guide through the maze and answer questions like: What is rent guarantee insurance, and why should you care? What does this type of insurance cover? When should you offer it? What are the limitations or risks of rent guarantee insurance? Who are the top providers of rent guarantee insurance in the U.S.? This service is all about reducing risk for owners, which is a massive value proposition for any property management company to offer their clients. We’ll also talk about some measures you can take to protect residents (and, therefore, owners) beforerent delinquency becomes an issue. We’re all about helping customers reduce risk. Here’s a great way to do it. What is rent guarantee insurance? Rent guarantee insurance is a type of insurance policy designed to protect property owners from financial loss caused by resident rent default. Essentially, it acts as a safety net, stepping in to cover missed rent payments for a predetermined period if a renter fails to fulfill their lease obligations. Think of it as a financial backstop, ensuring a property’s rental income remains stable even when a tenant falls into arrears. Let's break it down with an example: You may have a resident who passes your credit check and other screening with flying colors. But then, they experience identity theft and have their assets frozen for a certain period of time. Rent guarantee insurance would help to cover the unpaid rent while they’re getting back on their feet. In this case, it can help them stay where they are while they get their financial accounts restored – and protect your clients’ cash flow over that time. In other scenarios, the outcome may not be quite as sunny (fully restored and still a resident!). Let’s say there’s an economic downturn, and one of your residents loses their job. While no one wants to evict a resident, you may find your hands tied. With rent guarantee insurance, you can offer your owners the peace of mind that they won’t lose money during the eviction process. Providing services like this can set you apart from other property management companies and help drive leads. How does rent guarantee insurance work, and who needs it? Rent guarantee insurance is a benefit for property owners and is one option that property managers can offer their clients as part of a suite of services. It also can provide peace of mind to property managers, knowing their investors won’t be paying out of pocket if a renter stops paying. Here’s how it works: An insurance company offers coverage for a monthly premium. As a property manager or owner, you can pay that yourself or build it into the rental cost. Then, if a renter ever stops paying rent for nearly any reason, you can file a claim with the insurance company and get that missed rent paid while the resident is still delinquent. Rent guarantee insurance isn't a one-size-fits-all magic button for every property manager and owner. It’s most explicitly valuable for property owners who: Have new or unproven tenants: For first-time renters or those with limited rental history, the risk of default can be higher. Own multiple properties: Managing numerous rentals comes with a higher exposure to potential tenant issues. Rent guarantee insurance distributes that risk. Own high-value properties: The financial impact of missed rent can be particularly painful for owners of expensive properties. Rent guarantee insurance acts as a financial shock absorber. But rent guarantee insurance can be a good idea for anyone, depending on their risk appetite. Why is rent guarantee insurance important? Rent guarantee insurance can be a critical way to protect your clients’ – and therefore your – financial stability. For a monthly (or yearly) premium, you can ensure peace of mind in case a resident has a significant life change, moves out suddenly, or simply fails to pay rent consistently. This type of insurance can also take care of the hassle of following up with residents who have stopped paying and even starting the eviction process. Whether or not you opt for rent guarantee insurance, one of the best ways to ensure you’re protected is to focus on protecting your residents’ ability to pay rent. At Second Nature, we provide support for this through our Resident Benefits Package. Our identity protection feature ensures that if residents are ever the victim of identity theft, their missed rent payments are covered. Credit building helps ensure residents build financial security, and our renter’s insurance program helps cover other liabilities on the property side, including loss of rental income in covered scenarios. What does the rent insurance guarantee typically cover? Rent guarantee insurance is solely focused on protecting property owners from loss of income if a resident falls behind or defaults on rent payments. Since rent is the primary pipeline of income for a real estate investor, this is critical coverage if that kind of loss happens. Property owner’s insurance covers damage to a property but not loss of rent. That’s why this type of insurance is unique. Rent guarantee insurance won’t cover certain scenarios, like if there is a failure on the property owner’s sign to comply with a lease or keep the property habitable. A Note About Eviction Protection: Some services that offer rent guarantee insurance also include eviction protection, but not all do. Eviction protection specifically covers the costs of an eviction. Rent guarantee insurance may not involve an eviction at all (for example, in the case of identity theft, the resident may just suspend payments for one or two months while their finances are restored). Or, eviction costs may not be included in the rent guarantee policy. Property managers can include both rent guarantee insurance and eviction protection in their suite of owner services. Limitations of rent guarantee insurance Of course, rent guarantee insurance has its limitations, just like any type of insurance. Here are a few of the limitations to consider before you decide to pay for this coverage. Not all residents will be approved: Insurers do just as much due diligence as you do. They likely will refuse to cover a tenant with a history of defaulting on payments or a low credit score, etc. They may have different standards than you have established for your PMC. Insurance may take time to kick in: Most rent guarantee policies will kick in after a full month or more of non-payment. You may be on the hook for this. However, you may be able to use the security deposit to cover this, depending on local regulations and your lease agreement. Premiums can be pricey: Rent guarantee insurance can cost around 5-7% of your annual rent payments. Of course, you can find ways to fold this added cost into residents’ monthly rent payments, but you will need to be conscious of whether this tarts pricing you out of the market. You may promise more than you can deliver: Always be careful when marketing a service as a “guarantee.” We’ve seen property managers get in trouble when they can’t deliver on a “guarantee.” You may let down owners, or you may even get in trouble from a regulatory standpoint. Nothing is 100% guaranteed, even (or especially!) with insurance. Another risk? Thinking you can offer this yourself without an insurance license. Recently, a property manager in Texas got dinged by the Texas Department of Insurance for offering things like “pet guarantees” and “rent guarantees” without being licensed to offer insurance. That’s why it’s important to use a real insurance provider when you decide to offer rent guarantee insurance. And that leads us to our next section: The best providers for this service right now. Best rent guarantee insurance providers Here are the top rent guarantee insurance carriers available right now. 1. Steady Rent Steady Rent is geared specifically for property managers in the single-family rental space. They help property managers provide risk protection to their investors – you help them protect their rental properties, all while improving your bottom line. They provide two services: rent advance and an owner benefits package. Rent advance provides up to 12 months of rent payments upfront, regardless of resident payment. Property managers also receive their fees upfront. This is only available for investors working with property managers who are already partnered with Steady, and the property must meet certain requirements. Steady’s benefit package allows owners to access the Rent Advances, as well as rent protection of up to two months of rental payments if a tenant defaults. 2. TheGuarantors TheGuarantors focuses on rent guarantor insurance along with innovative risk management solutions for property owners, renters, brokers, and property managers. The company’s promise to residents is that they can help them get into a property they want but might not otherwise be accepted for. For investors and property managers, the promise is to reduce risk and strengthen their bottom line. They offer rent coverage, deposit coverage, and renters insurance. The fees are paid for by residents, so it adds no cost for investors or property managers. The company also says it will step in to help work with residents who have stopped paying rent. The downside is that some residents say the insurance comes at too high a price, and the user experience is not as good as comparable services. 3. Nomad Nomad is another single family property management software company that focuses on a rent guarantee. Their team also helps manage the details of marketing, screening, leasing, and any issues that arise with rent payments. The service is more applicable to self-managing landlords who need support in each step of the leasing process. The way Nomad’s process works is they manage the lease for you and pay you rent on time every month. For larger or more established property management companies, this won’t be the ideal solution as it likely won’t be flexible enough to your needs. 4. Home365 Home365 is a property management solutions company in the same vein as Nomad. They offer a “one rate” to the owner that covers rent guarantee, leasing and renewal fees, eviction fees, repairs and maintenance fees, and tenant turnover costs. They guarantee 12 months of full rent every year, with a rate subject to a deductible per incident. They have a platform for property managers and investors and a separate platform that helps residents find homes that are a good fit. 5. SureVestor SureVestor is a "landlord insurance" brand that helps cover unexpected costs for property owners. They partner with property managers to give a discounted price on their services. Their full coverage includes Scheer Landlord Protection Insurance, which covers malicious damage up to $35,000, loss of rent coverage, eviction costs, sheriff fees, legal expenses, etc. They also offer $1M liability coverage for property managers, up to $100,000 in tenant liability coverage, and a security deposit alternative service. 6. Tenantcube Tenantcube is a property management software solution that includes a rent guarantee in its package of services. They provide a rental management platform that helps support tenant screening, automated rent collection, lease templates, and management software. Their rent guarantee will make up payments when a tenant stops paying up until the tenant vacates the property. You can rely on coverage for up to one year or $60,000 in covered rent. They also support reimbursement of eviction legal fees up to $1,500 and malicious damage protection up to $10,000. Tenantcube is generally a good solution for more self-managing landlords who need support managing their properties – rather than established property management companies that need a more sophisticated solution. 7. World Insurance World Insurance’s rent guarantee covers renters if they involuntarily lose their jobs or otherwise can’t pay rent on time. They provide up to $60,000 of guaranteed rent as well as damage protection of up to $10,000 and eviction cost coverage. This service is geared towards renters themselves, and there are fairly high standards for who will be accepted. Approval can take a long time. 8. Insurent Insurent is a lease guarantor company available in some parts of the U.S., including New York, New Jersey, California, and a few other states. Renters can use the service to get approval in homes they otherwise would not qualify for, as long as they meet certain criteria like creditworthiness, employment, etc. For property managers and investors, it can support filling a property more quickly with residents who seem like good renters but might need a little extra coverage or a guarantor. This might include people like first-time renters who need to build a rental history. 9. Rent Rescue Rent Rescue is an arm of Next Wave Insurance Service. They reimburse rental owners for up to six months of lost rental income due to nonpays, including skips or eviction, and up to three months if the default is due to a court order, military deployment, or death of a sole tenant. It is available in most states. The idea of Rent Rescue is to close the gap between the moment that a resident stops paying rent and when you can finally resolve the issue. It’s a rent default insurance to help keep your cash flowing during this period. They also provide up to $1,000 in legal expenses to pursue eviction.

January 3, 2024

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Property manager handing new residents the keys to their new home

What is Security Deposit Insurance? Pros and Cons [+Best Providers]

Security deposits are an industry standard for property management. But new innovations are helping reduce some of the traditional pain points associated with security deposits. Here’s the thing; For property managers and investors, security deposits provide critical protection from financial fallout if the rental property is damaged. For renters, though, paying a security deposit upfront can pose a prohibitive cost, and an expensive security deposit can make it harder for the property manager to fill vacancies. Enter security deposit insurance – a modern solution that's reshaping rental agreements. We’re diving into everything you need to know about security deposit insurance: how it's different from the traditional security deposit, the pros and cons, and the scoop on the best providers out there. So, whether you're a seasoned property management business owner or just getting started, we’ve got you covered. (And that was an insurance pun.) What is security deposit insurance? Security Deposit Insurance is a coverage that residents purchase, which covers potential damages or unpaid rent during their lease period. Instead of paying a hefty upfront cash deposit, residents pay a fee for this insurance, which typically costs a fraction of the traditional deposit amount. For example, imagine a tenant moving into a home where the usual security deposit is $1,000. With security deposit insurance, instead of paying this amount upfront, the tenant might pay an insurance fee of $50 each month for a 12-month lease. This fee provides coverage to the owner for the duration of the lease, similar to a standard deposit, but at a lower cost to the tenant. This system not only eases the financial burden for tenants but also provides property managers and owners with coverage against potential lease violations, making it a potentially attractive option for both parties. What is the difference between a traditional deposit and security deposit insurance? A traditional security deposit is a lump sum paid by the resident to the owner (or held by the property manager) at the beginning of the lease. It’s often the cost of one month’s rent or another negotiated amount. The security deposit acts as a safeguard for the property manager in case of any damage to the property by the end of the tenancy. If there is significant damage, the property manager and owner can withhold refunding the deposit, depending on local and state laws that govern the use of security deposits. Security deposit insurance, on the other hand, gives residents a way to avoid paying that large lump sum at the beginning of their lease. Instead, they can pay for insurance. Like any insurance policy, they pay a monthly premium for coverage. The premium will be considerably less than a one-time security deposit. When a resident has security deposit insurance, their property manager can file a claim to the insurance company over things like lost rent or damages. The resident doesn’t get any of their monthly payments back at move out. Let’s go over some of the pros and cons of security deposit insurance. Related: How to Write a Security Deposit Return Letter + Free Template What are the benefits of security deposit insurance? Security deposit insurance provides benefits to renters, property managers (or a landlord), and property owners. Here are a few of the top benefits. 1. Reduces the upfront cost of move-in and protects residents' ability to pay rent We’ll just say it plainly: Moving is a huge, stressful life event that costs a LOT of money. One of the major costs of moving into a new rental home is the traditional security deposit. Renters may be paying two times or more the amount of monthly rent just to sign a lease. Security deposit insurance solves that upfront-cost challenge by providing a service at a much lower monthly cost. From the property management perspective, that means residents can keep more of their money to ensure they pay rent on time, and they may be happier to cover other fees like pet deposit fees, a resident benefits package fee, etc. 2. Helps reduce vacancies Because security deposit insurance removes one of the biggest financial barriers to signing a new lease, it can be a great way to reduce a property’s time on the market. By advertising that you accept security deposit alternatives like insurance, you can differentiate your properties on listings and fill them more quickly. 3. Covers unpaid rent This is one of the best benefits for property managers and owners. Traditional security deposits typically can’t be used until the end of a tenancy. But with security deposit insurance, property managers can file a claim over unpaid rent. The insurance typically will cover this. Some states allow property managers to cover missed rent payments with a security deposit, but some do not. If you’re in one of the states that don’t, you may want to consider allowing security deposit insurance. 4. Claims can be made at any time during the lease Like the coverage for unpaid rent, security deposit insurance can cover claims at any time throughout a resident’s lease. You don’t necessarily have to wait to be reimbursed for damage. What are the drawbacks of security deposit insurance? Of course, there are a few risks to security deposit insurance and reasons you may not want to make it an option for your residents. Here are some of the cons of security deposit insurance. 1. Not all claims will be accepted When you, as the property manager, submit a claim for coverage of unpaid rent or property damage, the insurance company may not decide to cover it. Each claim is evaluated at the time of loss to determine if coverage is applicable. Things like normal wear and tear are not covered. Plus, you’re not the one who gets to make the final decision. 2. Not all insurance providers or products are reliable This is true particularly because the industry itself is a newer innovation. Residents may pay monthly premiums but then find the coverage is not all that great. All of us have probably had some kind of experience like this with other types of insurance, too. Some claims aren’t covered, and some insurance companies promise a lot and deliver very little. 3. Residents are on the hook for monthly payments Generally, security deposit insurance is cheaper than a cash security deposit. But if the lease is long-term, the monthly payments may end up being more expensive than just paying a lump sum at the beginning of the lease. For property managers, you want to consider if it’s ideal for your residents to have an additional monthly fee they’re responsible for on top of rent. 4. It can be a hassle Nobody likes submitting or following up on insurance claims. It’s a hassle! The process is often clunky and slow and requires a lot of management. It may take weeks or months to get paid for a claim. Property managers may also need to put time and energy into educating residents or clients about how the security deposit insurance works and the differences in their options. (Or you could show them this article!) Best security deposit insurance providers Security deposit insurance is fairly new to the SFR property management world. Here are three of the best security deposit insurance products on the market right now. 1. LeaseLock LeaseLock is the category leader in this particular security deposit alternative space. In October 2023, the company surpassed $9 billion in insured leases. LeaseLock offers a modern solution in security deposit insurance, replacing traditional cash deposits with a unique insurance model. Their insurance coverage provides property managers with protection while easing the upfront financial burden for residents. The monthly cost to the resident is generally around $30, with $5,000 in coverage for unpaid rent and damage. 2. Obligo Obligo was launched in New York and helps property managers reduce their risks while making security deposits more affordable for renters. Residents pay a small monthly fee for the service while Obligo sets up secure billing authorization between property managers and the resident. The property manager is then authorized to charge the resident for damages up to a pre-set maximum. It’s essentially the same as the type of pre-authorization hold that a hotel might place on a guest’s credit card. Residents won’t be charged unless they cause damage or miss rent, and they will only be charged up to a certain amount. Some residents will not qualify for Obligo’s services, depending on credit rating, etc. The company has a high trust rating on Trustpilot. 3. Rhino Rhino offers a slightly less straightforward insurance model but is a leading solution in security deposit alternatives. Through a surety bond model, their service provides robust protection for property owners while significantly reducing move-in costs for residents. Rhino is sued in over two million homes in the U.S. and claims to save renters over 90% on moving costs. Some former customers complain about unreliable costs and being on the hook for claims. Final thoughts Security deposit insurance is reshaping the rental landscape, offering benefits for both residents and property managers. Providers like LeaseLock, Rhino, and Obligo are at the forefront of this change, providing innovative solutions that ease financial burdens and streamline rental transactions. As the industry evolves, these services may become a new standard in property management. The goal is to make life easier for renters, owners, and property managers. At Second Nature, our goal is the same. We help property managers provide the best residential services and solutions, all while building opportunities for ancillary revenue. We provide a package with solutions like renters insurance, credit reporting, and resident rewards, all built to help protect a resident’s financial stability and reduce risk to your property management company. Plus, it’s completely handled for you, so your team can focus on what they do best: manage your properties.

December 21, 2023

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Pet Screening 101: How Top Property Managers Do It

Pet screening: it’s a big part of a property manager’s responsibilities, but – as any PM will say – it can also be a major headache. More residents have pets now than ever before. According to the 2023-2024 American Pet Products Association’s (APPA) National Pet Owner Survey, 66% of U.S. households own a pet. That means property managers are dealing with pets more often than not. On the flip side, investor clients may be reticent to allow pets on their properties. The result? It can be tough to fill vacancies in properties where pets aren’t allowed or the screening standards are too restrictive. So, how do you handle these situations? How do you push for more pet-friendly policies if you need to fill vacancies? How do you protect yourself and your investors from risk? In this article, we’re sharing the best advice we’ve gotten about pet screening, why it’s important to do it well, the steps to a good pet screening process, and a pet screening checklist. What is pet screening? Pet screening is the thorough evaluation of a prospective tenant's pet before approving their lease application. Essentially, it’s a pet background check. It's not just about keeping furry friends out of your pristine property; it's about minimizing risks, following any service animal requirements and ensuring you are protected from any potential damage. A thoughtful pet screening process allows you to delve into the true compatibility between a pet, its owner, and your rental property – and to ensure you’re prepared for any associated risks. A note about assistance animals: It’s important to distinguish that we’re talking about pets not assistance animals. If you’re dealing with an assistance animal, you should not have the word “pet” anywhere on the lease. This may sound odd to laypeople, but an assistance animal is legally considered a disability device, not a pet. Assistance animals include service animals, emotional support animals, etc. How you deal with assistance animals – both service and support – is guided by your local laws. Property managers should familiarize themselves with the Fair Housing Act, specifically the FHEO-2020-01 Assistance Animals Notice from HUD, for guidance on assistance animals. These animals are regulated through guidance by the ADA and ESA. But for animals that are simply there as beloved pets, you need to set up your own standards for pet screening – and understand where reasonable accommodation must be made. Why is pet screening important? Properly setting expectations and standards for pets – and screening any new pets at the home you manage – creates a number of benefits for you, the resident, and the investor. Here’s why it’s so important: Property protection One of the primary reasons for pet screening is to protect the property from potential damage. Pets can sometimes cause significant wear and tear beyond the usual scope, like scratched floors, damaged fixtures, or stained carpets. By conducting a thorough pet screening, property managers can assess the risk each pet poses to the property. This process often involves checking the pet’s breed, size, temperament, and history of behavior. Understanding these factors helps in making informed decisions about whether to permit the pet and setting appropriate pet deposits or pet rent to cover potential damages. Neighborhood comfort and safety Ensuring the safety and comfort of your residents – and their impact on the neighborhood – is a top priority, and pet screening plays a crucial role in this. Some pets may pose a safety risk, especially if they have a history of aggression. By screening pets, property managers can prevent potentially dangerous situations, ensuring that you don’t end up having to deal with complaints or legal repercussions. Other pets may simply be a nuisance. Excessive barking in the backyard can bring noise complaints, etc. Risk mitigation Pet screening is a proactive measure to mitigate various risks associated with allowing pets on the property. These risks include potential legal liabilities in case of pet-related incidents, such as bites or property damage. Having a detailed pet policy and screening process in place can protect the property management company from legal disputes and financial losses. Moreover, it ensures that pet owners are responsible and aware of their obligations, which include taking care of their pets. Incorporating a comprehensive pet screening process not only safeguards the physical property but also contributes to the overall well-being and safety of the home, neighbors, etc. Related: How to Write a Pet Violation Letter to Tenants + Free Template How to conduct a pet screening According to Victoria Cowart, Director of Education and Outreach at PetScreening.com, the most important factor in your pet screening process is consistency. “The best policies are the ones consistently applied,” Cowart says. “That’s the greatest challenge I see in the industry.” Here are the steps to a successful pet screening process. 1. Document all pet rules and regulations Start with establishing the rules on your properties. Remember, you should be consistent in how those rules are applied across all of your portfolio, so don't make a rule unless you’re willing to enforce it equally. Make sure that all prospective residents are clear on the rules, restrictions, and fees associated with pet ownership. Do you charge a pet fee like a pet deposit fee? Make that clear from the start. 2. Have the right tools at your disposal While the pet screening process is very precise and should be taken seriously, you can also use tools and third-party services to help make it easier. PetScreening.com is one pet screening service that supports property managers in pet screening. Instead of leaving you with all the decisions to make, Pet Screening does it all for you. They have an in-depth questionnaire and screening process. In the end, they provide you with a FIDO score that assesses everything you need to know about the pet. 3. Provide a pet screening application For any prospective residents who are pet owners, the next step is to have them start the application process. This is the key part of the pet screening process. When outlining the content of your pet screening application, Cowart says to focus on two pillars: liability and responsibility. Liability will focus on the animal’s history. Responsibility is more like a “tenant screening” that will focus on the owner’s habits. “You need to know how much the resident is doing to ensure their pet doesn’t have an adverse impact on the rental and on the community,” says Cowart. “Are they picking up after their animal? Do they walk them on a leash? Do they take them to the vet regularly?” The application should include pet profile details like: Age Height and weight Breed/type of pet Medical history Spayed/Neutered Length of ownership Housetraining status History of obedience training Behavioral issues Vaccination status (and proof of vaccination) Previous history of aggression Veterinarian information (See our full checklist below for more.) Many property managers focus on breed restrictions, but the evidence shows that breed is less of a factor in a pet’s behavior than you might think. The animal’s history and the owner’s behavior are more important to look for red flags of whether a dog is aggressive or not. Breed or weight questions should always include greater context. 4. Conduct a pet interview Not all property managers will feel the need to do this. However, having a member of your team meet the animal in person may be something your investor-clients want or that you feel helps establish a better relationship and limit liability. This is also more common in apartment complexes or multifamily housing. For single-family property managers, the pet interview isn’t necessarily as important. However, if you do conduct a pet interview, it’s important to confirm that the pet you’re meeting matches the description in the application. Pay attention to how well it listens, how it approaches you, and whether it shows any signs of aggression. 5. Ensure you are complying with all laws Before approving or denying a pet, do a final check to make sure you’re following all local, state, and federal laws. This is most important when considering assistance animals. Even homes with a no-pet policy will often need to accept assistance animals. 6. Include pet rules in the lease You should have a pet addendum ready for your lease signing. Walk the new residents through these. They shouldn’t be surprised by anything if you follow Step 1 and are clear with them on rules and fees from the beginning. If you require a pet security deposit, that should be given at this time as well. 7. Make sure pets are covered through insurance A big reason people deny pets is because they feel unsure about the risks and they don’t have a way of addressing them. That’s what insurance is for, but here’s the rub: A lot of pet owner policies exclude a lot of breeds, which can limit the number of residents you can approve at your properties. At Second Nature, we provide a renter’s insurance program that covers dog bits for all dog breeds. It’s one of the few programs on the market that doesn’t include breed restrictions. Second Nature’s renter’s insurance program (a part of our Resident Benefits Package) covers all breeds that the property manager approves. What are the benefits? Residents with household pets have stronger lease retention than residents without pets as a group. Furthermore, residents with aggressive breed dogs have a higher lease retention than residents in general. Fewer properties are available to those residents because most people are saying no to their pets. You can be the one who says yes – and gets a happier resident who wants to stay longer and be a responsible pet owner. With the right coverage, you can: allow more residents to apply reduce vacancy costs fill homes faster have a stronger lease retention over time increase opportunities for ancillary revenue. It’s a win for the pet owner, a win for you, and a win for your clients. Pet screening checklist Here’s a brief checklist to help you keep track of what you need to know about pets. Share this with prospective residents to help them prepare what they’ll need. Pet Resume: Include your pet’s breed, age, weight, and a brief description of their temperament. Mention any training your pet has received, especially obedience or socialization training. Vaccination and Health Records: Provide up-to-date vaccination records. Include any regular flea, tick, and worm prevention treatments. Spay/Neuter Confirmation: If applicable, provide documentation confirming your pet is spayed or neutered. Behavioral Information: Disclose any known behavioral issues and the steps you’re taking to address them. Include information about your pet’s typical behavior around people and other animals. References: Provide references from previous landlords or neighbors, especially if you’ve lived in a rental with your pet before. A letter from a veterinarian attesting to your pet’s good health and behavior can also be helpful. Pet License: Show proof of a current pet license, if required by local laws. Pet Insurance: Consider obtaining pet insurance that covers any damages your pet might cause. Second Nature provides this as part of a Resident Benefits Package. Residents can opt into the coverage or provide their own. Photos of Your Pet: Include recent photographs of your pet for easy identification. Agreement to Rules and Regulations: Acknowledge and agree to any pet policies or rules set by the property management. Final thoughts Pet screening doesn’t have to be a major headache. With the right tools and a standardized process, you can make it easier on your team and easier on prospective residents. The goal, after all, is to find residents who will care well for their pet and the property – and hopefully stay for the long term. At Second Nature, we provide extensive pet coverage in our Resident Benefits Package. The goal is to reduce liability for you and make it easier to accept good pets, regardless of their breed. Rest easy knowing you and your residents are covered.

December 20, 2023

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How to Build a Lead Generation Engine for a Property Management Company

Navigating the world of property management can often feel like a high-wire balancing act, particularly when it comes to property management lead generation. But fear not! The path to success becomes clear when you understand your target market, communicate effectively, and employ savvy lead-generation strategies. More good news: We know a guy who happens to be an expert in scaling up residential property management companies – Jeremy Pound, CEO of RentScale. We reached out to Jeremy to talk about the ins and outs of how to approach successful customer acquisition strategies for residential property managers. In this article, he’ll help guide us through key steps, providing actionable insights to help you attract and secure your ideal property management clients. Let's turn those potential leads into lucrative opportunities! Meet the Expert: Jeremy Pound, CEO of RentScale Jeremy Pound is the CEO of RentScale, the largest sales consulting and coaching company in the residential property management industry. They’ve trained over 400 companies on how to successfully grow their property management business by becoming “new customer machines.” He is also the publisher of Strategic PM - The Magazine for Property Management Entrepreneurs and Executives. 1. Define your ideal target market Not every prospect is a fit. And the key to growth is targeting the right people with your marketing strategies. When first starting out, a property manager might focus on pure hustle and price. But eventually, that’s no way to scale for profitability. (On that subject, Pound recommends the excellent management book, “What Got You Here Won’t Get You There,” by Marshall Goldsmith.) “Something I talk about all the time is that the opposite of ideal fit client is a misfit,” says Pound. “You want to work hard to avoid those misfits, which means you need to label the right-fit clients, know who they are, and describe them. That's the best way to grow: not just getting more net clients, but getting better and better quality clients.” In short, build high-quality leads by defining your ideal customer. Pound outlines the specific types of property management investor clients: Experienced investors: “There are different types of experienced property owners. Are you going after those who value risk aversion and peace of mind? Maybe you're charging a little more and adding more ancillary services, but you're protecting them from all the things that can go wrong. Or are you going after really aggressive risk-takers who are looking to optimize every dollar possible?” Accidental landlords: “Are you built to serve accidental landlords? Oftentimes homeowners move on, they move up, or they downsize, and they look to keep their very valuable properties as rental properties.” Working professionals: “Maybe you’re going after working professionals, such as high earners who are building a portfolio as property investors. They got the real-estate investing bug, they know that maybe they don't want to pull their money into 401K and index funds, and so they're actually using new property to build a portfolio for retirement.” Out-of-town investors: “Are you really built to serve out-of-town real estate investors? There are a lot of people, myself included, trying to build a diversified national portfolio of single-family rentals, and [some PMCs] are really built to serve that person because they need somebody local who's an expert and understands that local market. Once you define your ideal customer, which is the most important step, everything comes from there, Pound says. 2. Clarify how you are built to serve those clients best According to Pound, the simplest next step is to build your processes and procedures around that target ideal client. “Everything we do should be a story around why all of our policies, our pricing, our procedures are all built to best serve that client,” he says. “I like to call this ‘avoiding the commodity tax.’ If you go out and spend money on advertising, or if you're buying new leads, or you're trying to spend money on SEO as if you're just a commodity and you've got nothing exciting to say – no sharp story, no compelling positioning – then you're basically paying the commodity tax.” “You're going to have to buy all these leads, and most of those people are not going to buy from you,” he continues. “You might be buying 10 leads to close one deal, or you might be spending a bunch of money on advertising that's just going over everybody's head. Nobody's paying attention to it because it's not exciting.” This brings us to the next strategy… 3. Use dog whistle language Pound emphasizes that what catches our attention is the uncommon, the novel, and the specific. Our marketing should cultivate that specificity. Here’s how: “A term that we like to use around here is Dog Whistle Language,” Pound says. “If you know a dog whistle, only a dog can hear it. So when you know who your client is, it allows you to speak Dog Whistle Language – their language.” “I always try to enter the conversation that's already happening in their mind. If we have a very specific client, we know the problems that they're trying to solve, we know the frustrations they have and the goals they have. So let's just enter the conversation that's already happening in their mind! That’s going to make your content marketing less expensive and way more effective, and it's going to make your sales process even better.” “If we can say what our prospects are already thinking, but we can say it better with more clarity, then they're going to key into that.” Ask yourself: What are they already thinking? What is the problem they're trying to solve? What are the frustrations they have? Then, describe it even better than they can, says Pound: “That has been proven to create trust, to create authority. and to make them remember you.” 4. Understand demand generation vs. demand fulfillment “We want all our clients generating demand for their service,” Pound says. Demand fulfillment is “just going out and buying pay-per-click ads because people are already searching for your product.” This is a commodity-based approach. Let’s say something needs a new roof. They’re just going to type “roofer Boca Raton.” Pounds says that’s demand fulfillment: “You're just fulfilling the demand that's there, right? You're just hoping to get lucky. You're spending as much money as possible and just showing up.” Instead, Pound says, “Demand generation might be going out and talking to people about how if they've had any storm damage, they might be able to get their roof replaced through their insurance.” “There's a lot of examples of this in property management,” Pound says, “especially when you're going out, and you're teaching people to invest in real estate – actually going out there and creating the market for your product. It's more sophisticated, but it's way more profitable, and you have way more control over that than just sitting around and playing the demand fulfillment game.” Pound gives an example of a PMC going after high-net-worth individuals. “Let’s say you’re in Florida, where Publix is headquartered, you might be going after all the executives at Publix. You’re basically saying, ‘Look, there are other ways to pay for your kids' education. There are better ways to save for retirement. You can live a better life if you get involved in real estate investing.’” That’s demand generation. 5. The Buyer’s Pyramid: Have campaigns for each level of the buyer’s journey Source: "The Ultimate Sales Machine" by Chet Holmes ‍ Time to get into the Buyer’s Pyramid. The top 3% are in the demand fulfillment mindset. They know what they need, they’re searching for the service or product, and they’re ready to buy. Then there’s 7% that are loosely open or becoming open to the idea of needing a product or service. As Pound says, “Maybe they're kind of frustrated with their property manager, but they're not so frustrated yet that they're ready to go search on Google.” That’s the moment to hit them with direct mail, email marketing, cold calling, or messaging that enters the conversation that’s already happening in their mind. Pound says to aim to say what they were thinking better than they can say it. Then they may move up into the 3% who are ready to make a decision. Below that is 30% of the potential market that isn’t aware of the existence of your product. They may be renting their homes or about to sell and simply don’t know that property management services exist. Then there's another 30% of the market that just misunderstands. Pound elaborates: “Maybe they’ve been self-managing forever, and they think that property managers just take a piece of the pie rather than make the pie bigger.” “Really good property managers explain to their prospects that they don't just take a piece of the pie,” Pound says. “Really good property managers actually expand the pie. They get more money for the property either by being able to charge more through marketing or reduce vacancy and turnover – and therefore, they're able to actually reduce all the losses that you would have from a rental property.” In the end, you can focus on each of those separate types of prospects and build campaigns that speak directly to them. 6. Track the numbers and optimize: Unit Acquisition Cost & ACV To optimize your acquisitions, it’s key to understand your numbers. That’s obvious, but how do you do it, and what are the most important numbers to track? Pound points to unit acquisition costs (UAC), customer lifetime value, and annual contract value (ACV). “We have monthly recurring revenue for months and months, if not years and years,” Pound says. “So you have to understand some of these numbers.” Unit Acquisition Costs (UAC): “How much does it cost you to acquire a door?” Annual Contract Value (ACV): “How much does each customer bring me annually?” Customer Lifetime Value (CLV): “How much does each customer bring me over their entire lifecycle as my client?” Pound breaks down how CLV affects your judgment on UAC. If a customer stays with you for five years and you're making $200 a month, their lifetime value is going to be $12,000. “You start to understand that you're willing to invest a little bit more than you thought to acquire that customer,” Pound says. This brings us to…. 7. Build the list and lower your costs You want to be always building your list of potential clients and client referrals. “Think about that buyer's pyramid,” Pound says. “Think about attracting and courting those people that are lower in the pyramid before they're ready to buy. We can actually acquire those people for pennies on the dollar versus the really high expense of going after Google pay-per-click or buying leads.” “Let’s say one day, a major life or business event will happen that will turn a prospect into a buyer today. Instead of having to go to Google to look for you, where you have to spend $17 per click, they already look to you for advice and help because you’ve courted them over time. When the life or business event happens, they’re ready to buy from us.” 8. Sweat equity or check equity It takes investment to create clients. In the end, Pound says, that investment decision comes down to: “sweat equity or check equity.” Sweat equity = time spent Check equity = money spent “Some entrepreneurs and business owners have more time than money, and they're going to want to spend money on advertising that works,” Pound says. “On the other hand, some entrepreneurs or property management owners have more time than money, and they're going to want to invest their time.” Sweat equity could look like: Networking with referral partners Direct outreach (outbound) to investors Calling FSBOs Partnerships Facebook Groups Forums Hosting events or going where the investors are Social Media (LinkedIn, Twitter, YouTube, FB, Bigger Pockets) Organic online marketing Search Engine Optimization (SEO) Webinars Check equity could look like: Direct mail Digital marketing (Google ads/PPC, YouTube, LinkedIn, Bigger Pockets, FB) Radio and TV Pay-per-lead Outdoor Hosting premium events with recognized speakers Final Thoughts In the end, getting qualified leads and new business is all about targeting and positioning. As Pound says, “The punchline at the end of the day is: If you’re going to spend money and time, you might as well be positioned. You might as well have the right language – the dog whistle – so you can get more out of every ounce of your sweat equity or every penny of your check equity.” For more insights from leaders like Jeremy, check out our Triple Win Podcast for residential property managers. Or, here are a few places to keep reading about growing your PMC: How to Create a Property Management Business Plan [Free Template] 15 Strategies to Grow Your Property Management Business Marketing Ideas for Property Management Companies

December 12, 2023

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20 Ways to Get More Property Management Leads

Here's something that might seem surprising about today's housing market: High mortgage rates for buyers could actually mean better property management leads for property management companies. That's right, we said it! Consider this: As high rates cut into the ultimate value a seller can get for their property, many homeowners are renting out their properties rather than selling them. That in turn creates a growing demand for skilled property management. The situation presents an advantageous landscape for property managers looking to expand their client base and get property management leads. And that's exactly what we're talking about in today's article: property management lead generation. We're exploring 20 effective strategies to tap into this market potential, from leveraging referrals and business networks to harnessing the power of digital marketing. Let's dive into how you can capitalize on the current market trends through property management marketing and secure more clients for your property management business. 1. Referrals This is a great step for new businesses. You can get referrals to new clients from friends and family, local BNI groups, realtors, and other clients. Leverage your existing network and ask for referrals. Satisfied clients and professional contacts can often provide recommendations to potential leads. You can also create ancillary revenue by charging a referral fee for your own referrals. 2. LinkedIn Another good one for new business, use LinkedIn to connect with potential clients, join industry groups, and share valuable content. It's a powerful platform for B2B lead generation. 3. Event Marketing New companies can host or attend industry events to network with potential property management clients. These can range from local real estate meetups to larger industry conferences. 4. Cold Calling While it may seem old-fashioned, cold calling can still be effective, especially if you’re just getting started. Just ensure you're targeting the right property owners and property investors in your local market and offering clear value. 5. Facebook Facebook, and other social media marketing, is effective for new and growing companies. Use targeted Facebook advertising or post in local groups to reach potential clients. Consider running ads targeting landlords or real estate investors. For growing companies, use advanced targeting options in Facebook Ads to reach a larger, more specific audience. Consider retargeting ads to website visitors or people who have interacted with your content. 6. Podcasts Podcasts also work well to launch your first marketing strategies or to help boost a growing company that has plateaued, or just needs a fresh take and new leads. Start a podcast or guest on existing ones (like our Triple Win Podcast). Discuss industry topics to establish your expertise and reach a larger audience. 7. Local Businesses & Strategic Partnerships When you’re just getting started, it’s a great idea to partner with local businesses that serve the same market. For example, a local moving company might recommend your services to new residents. You can also join local clubs and the Chamber of Commerce and attend meet-ups to build a network that refers high quality leads and clients. 8. Direct Mailing New companies should send targeted direct mail campaigns to potential leads. This could include newsletters, postcards, or informational brochures about your services. 9. Niche Forums Launching a new business requires support and community. Participate in online forums related to property management or real estate. Answering questions and sharing insights can help attract potential clients. 10. Read Local Listing Reviews Looking for your first few clients? Monitor local listing reviews such as on Google and Yelp to find landlords who may be having trouble with their properties. Reach out to offer your services. 11. Browse Newspaper Ads Another great way to find those first 10 or 20 clients is to look for rental listings or properties for sale. Reach out to the owners to offer your property management services. 12. Content Marketing Now we’re getting to a strategy for a growing and established company. Create valuable content on your website and social media channels. This can include blog posts, infographics, or eBooks that provide insights to property owners. A good example of content marketing for lead generation is Realty Medics. 13. Google Ads (PPC) Established PMCs can run pay-per-click (PPC) campaigns on Google to appear in search results for relevant keywords. This can help attract landlords or property owners searching for management services. This is one of the best online marketing strategies. 14. Search Engine Optimization (SEO) A great step for companies looking to keep growing is to optimize your website for SEO and content with relevant keywords to rank higher in search results, increasing visibility and attracting organic traffic. 15. Email Marketing Worried about your company’s growth plateauing? Nurture your existing email list with regular newsletters or updates, providing valuable information and promoting your services to encourage conversions. 16. YouTube (Videos and Ads) Create educational videos on property management topics or advertise on relevant channels to reach a wider audience on YouTube. This is ideal for a company that already has a network of clients, but could also help you start out. 17. Webinars Once you have an audience established, host webinars on relevant topics to provide value to your audience. This can help position your company as an industry expert and attract potential leads. 18. TV Ads Depending on your budget, consider TV advertisements. Although more costly, they can reach a wide audience and increase your brand visibility. These are ideal for large companies. Single-family rental property managers aren't typically going to go this route. 19. Billboard Ads Like TV ads, SFR property managers likely won't be using TV ads, but it certainly is a strategy in the larger property management world. Outdoor advertising, like billboards, can help increase local visibility for companies that already have an established reputation. However, it’s best suited to companies targeting property owners in specific geographical areas. 20. Pay-per-Lead Services Use services that sell qualified leads. While this involves upfront costs, it can provide a stream of potential clients who are actively seeking property management services. Final Thoughts For more insights about lead generation strategies, check out our Triple Win Podcast for residential property managers. Or, here are a few places to keep reading about growing your PMC: How to Create a Property Management Business Plan [Free Template] 15 Strategies to Grow Your Property Management Business Marketing Ideas for Property Management Companies

December 6, 2023

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Security Deposit Alternatives for Property Managers and Residents

A security deposit is a one-time, refundable payment made by a tenant before moving into your single-family rental home. It acts as financial insurance against potential damages, unpaid rent, or cleaning fees incurred during their tenancy. Security deposits are large sums of money, and constantly change hands in the single-family rental (SFR) community. Traditional security deposits are standard in the industry but aren’t ideal for everyone. They can typically cost over the first month’s rent for residents and can be a hassle to manage for property managers and investors. If you’re familiar with our Triple Win approach and resident benefits, you won’t be surprised to learn there’s a different way. Security deposit alternatives typically allow tenants to pay their security deposit in installment payments instead of a lump sum before their occupancy of a rental property. Continue reading to find out more about the different types of security deposit alternatives, their cost, and their pros and cons to help you choose the one that works best for you. Related: How to Write a Security Deposit Return Letter + Free Template Types of Security Deposit Alternatives Security deposit alternatives can be achieved through pure insurance, surety bonds, ACH authorization, or an in-house program. Property managers may choose these types of alternatives because they aim to lower the barrier to rental for residents. As a result, this lower barrier increases the ROI for the owner and boosts the PMC’s bottom line. These options, however, are not a one-size strategy. They can vary based on the business size, strategy, and state and local laws. In addition, there are several different ways to apply. For example, insurance, surety bonds through a bond company, and ACH authorization are all available through third-party vendors, which are increasing in popularity. Next, we’ll walk through each of these security deposit alternatives. Pure insurance This is exactly what it sounds like. Instead of a deposit covering potential damages, the resident takes out a policy with an insurance company to cover any damages. The resident pays a small premium, and on move-out, the policy covers any damage to the property up to a certain amount. Pure insurance is great for the resident, who pays a premium and then bears no financial responsibility for damages after move-out. Inherent in that approach, however, is a flaw that makes the pure insurance play tough to buy into as the industry's future. It doesn't incentivize the resident to take care of the property, as they won't owe any additional money for any damage they cause. This flaw leads to higher premiums, leaving insurance as a less effective way to keep costs down. Surety bond The surety bond business model is not new. Still, it's become more popular as vendors have modernized the enrollment experience thanks to over $150M of VC investment into the category. Surety bonds are agreements between two parties managed by a third party, known as the surety. In the case of property management, the contract is between you as the property manager and the resident. It states that the resident agrees not to damage the property and agrees to cover damages should they be responsible. In case of a contract breach at the end of the lease, the surety pays out the sum required to the property manager, then bills the resident the cost of the damages. Surety bonds attempt to incentivize the resident to take care of the property, which is more than a pure insurance program will do, but there's not a definitive set of evidence yet that this is highly effective. It's still a challenge to educate some residents that this isn't an installment plan or insurance product. In many cases, that falls on the property management team. Another concern with the surety bond model is the post-move-out collection results. The majority of damages due from the resident never get collected, which leaves the model with potential recourse ahead: Vendors figure out how to collect a higher percentage Vendors increase monthly pricing Vendors expand into other, more profitable products Less reliable claims payouts Layoffs or other financial controls More investment was requested for more runway The jury is still out on whether surety bonds have the unit economics to win the category. ACH authorization The ACH (Automatic Clearing House) authorization is a popular alternative. It mirrors the method hotels have used for years to compensate for incidentals and applies it to long-term rentals. Residents permit a financial institution to directly draft money up to a certain amount to cover damages and draw from your bank account. The ACH authorization does check the box of incentivizing proper treatment of the home, and the vast majority of money due from claims is collected. So far, this method seems to be getting the best results in post-move-out collections. A fair critique is not 100% of residents qualify for this, and the ones that don't must pay a traditional deposit, so it isn’t a complete solution in some people’s minds. In-house program Todd Ortscheid, CEO of Revolution Rental Management, built his alternative program in-house. Ortscheid spoke on this topic in an episode of Triple Win LIVE in February. “We offer the resident two different options. You can either pay the security deposit amount based on your [application] score, or the alternative is you can pay a monthly security deposit waiver fee,” says Ortscheid. “What the waiver fee is doing is buying you the privilege of not having to pay a security deposit upfront.” Ortscheid clarifies that his implementation of this program is neither insurance nor a refundable installment towards a security deposit. However, there is debate among other PMs and their attorneys about what compliance risks there could be here. Some property managers also struggle to get comfortable with the financial liability. Related: Benefits of Property Management Outsourcing Services When deciding to outsource or DIY, we recommend considering three things: How much of a difference can scale make now? Over time? How large is the skill or expertise gap here? Over time? Is this the best investment of my time? Will it be later? Security Deposit Alternative Companies and What They Offer The traditional security deposit is the OG of rental insurance, a reliable one-time payment typically equal to one month's rent. It works like a financial handshake between the resident and property manager/owner, acting as a safety net for unpaid rent or damages beyond normal wear and tear. While it carries no monthly cost for residents and offers full refunds for responsible renters, it also doesn't offer revenue sharing for investors or the flexibility of newer alternatives. Here's what to expect from a traditional security deposit product, and the baseline we'll be comparing alternatives to: Model: Traditional Up-front cost to resident: Equal to established cash deposit Monthly cost to resident: None Unpaid rent & damage coverage: Equal to established cash deposit Revenue share with property investor? N/A Payments refundable to resident? Yes Resident held accountable for funds? N/A We reached out to Peter Lohmann, co-founder and CEO of RL Property Management, to get the rundown on security dispositive alternative products. Here are some of the most popular security deposit alternative services, the type of product they offer, and the pros and cons of each. Note: The major downside for most of these security deposit alternative products is that they focus on multi-family rental (MFR) communities rather than single-family rentals (SFR). Most also have nonrefundable fees. 1. LeaseLock LeaseLock is a popular security deposit alternative program. Here’s how they stack up: Model: Lease Insurance Up-front cost to resident: None Monthly cost to resident: $29 for standard plan Unpaid rent & damage coverage: $5,000 for standard plan Revenue share with property investor? No Payments refundable to resident? No Resident held accountable for funds? Yes but Lease Lock says they don’t pursue 2. Obligo Obligo is a billing authorization alternative to security deposits. Here’s how they stack up: Model: Bill Authorization Up-front cost to resident: First year’s total fee (variable) Monthly cost to resident: None Unpaid rent & damage coverage: Equal to established cash deposit Revenue share with property investor? No Payments refundable to resident? No Resident held accountable for funds? Yes 3. Rhino Rhino offers the surety bond model for security deposit alternatives. Here’s how they stack up: Model: Surety Bond (non-pooled) Up-front cost to resident: None Monthly cost to resident: Variable Unpaid rent & damage coverage: Equal to established cash deposit Revenue share with property investor? Yes, if over 10K units Payments refundable to resident? No Resident held accountable for funds? Yes, but Rhino says they don’t always pursue 4. TheGuarantors, Jetty, and SureDeposit These three companies – The Guarantors, Jetty, and SureDeposit – all offer an alternative to security deposits in the form of a surety bond. Here’s how they stack up: Model: Surety Bond (pooled) Up-front cost to resident: 17.5% of month’s rent Monthly cost to resident: None Unpaid rent & damage coverage: Equal to established cash deposit Revenue share with property investor? No Payments refundable to resident? No Resident held accountable for funds? Yes The Cost of a Security Deposit Alternative Security deposit alternatives costs don’t necessarily save money for the resident, but they offer a choice that many residents prefer – not giving up a big chunk of cash right at the start. In general, the cost structure for security deposit alternative companies is either a low monthly fee or an annual fee. For most PMs, you can include the cost in a Resident Benefits Package, or it’s billed directly to them by a vendor. The cost can depend on the property's value, the rent and deposit amount, the resident’s credit, etc. Fees are calculated based on the amount of rent, amount of deposit, credit score of the renter, and the value of the client. Security deposit alternative fees can often be as low as 5% of rent. So, for a rent of $1500 a month, a resident might pay: $75 per month (5%). In some larger apartment communities, residents may pay even less – typically $8-$30 per month. Advantages of Security Deposit Alternatives The concept of a security deposit alternative is that it helps lower the barrier of entry for residents who may not want to put down a massive one-time chunk of cash – and it helps protect the investor by filling vacancies more quickly, and incentivizing good care of the property. Here’s a breakdown of more specific advantages. 1. Avoid large deposits for residents Ortscheid says: “When I first started doing this, my assumption was the only people who will take this are the people with the worst scores. “What we actually found was our very first person who signed up for it was someone with an 800+ credit score. He was the CEO of a publicly traded company and had millions in the bank. So I asked why he took the waiver option, and he said, ‘I would rather pay monthly than give you a big chunk of my money.'” 2. Get more options All of these programs can be relatively simple to administer and offer choice to the resident. They can choose options and payment methods like credit cards, ACH, etc. According to Ortscheid: “About 70% of the people we rent to now select the security deposit waiver option.” Giving residents more options helps them feel more secure and in control and boosts their satisfaction overall. 3. Reduce vacancies Perhaps the investor sees the most significant win from security deposit alternatives. And, given the PM’s fiduciary responsibility to the investor, an investor win is usually a win for you. The biggest thing here is the attractiveness of the program to the resident. A security deposit alternative is something you can and should advertise in your listings. It adds a differentiating factor to your listing that moves the needle for many prospective residents, which helps keep your days-on-market low. Revolution Rental Management has been sitting at an average of about ten days on the market over the last year. And as we all know, minimal vacancy equals increased ROI for investors. 4. Get fewer damage claims at move-out Additionally, some property managers claim the lack of a deposit drives fewer damage claims at move-out. This reduction in claims helps to protect the investor’s assets more than a deposit does. Again, this may seem counterintuitive, but Birdy Properties reports this scenario playing out since they moved away from security deposits two and a half years ago. “There is this philosophy out there from residents. Most people believe ‘you’re not going to give me my money back. And since I’m not getting my money back, I’m not going to clean up too well because if I do all that work, you’ll still keep my money anyway. Well, now, you were nice enough to let me move in and not have to give you all this money. Everything has gone well, and now it’s time for me to leave and I can recognize that if I don’t leave the property in good shape, I’m going to have to pay for it.’” “We’ve watched the numbers,” continued Birdy. “We have seen a reduction in overall move-out claims. What it’s costing to turn a property over has gone dramatically down, and we have almost eliminated the turnover cost to the owner. That is the most vulnerable time for us as property managers because that’s when the investor decides if they want to keep this asset any longer.” The speed with which Birdy Properties can roll in another resident with minimal costs keeps the property investors happy, which prevents the PM from losing inventory while maintaining great service and relationships with the client. This great relationship comes from a service residents love, so it all works together to benefit every party. Best practices are developing that will drive triple-win experiences. Disadvantages of Security Deposit Alternatives Of course, there are also disadvantages to security deposit alternative services. These issues may affect your residents' overall experience or your investor's satisfaction with their margins. Before signing up for any alternative security deposit product, you need to be sure you know what you’re getting into. Do your research and ask questions to evaluate things like: what happens if a resident ends their lease early; what damages are owed after move-out and who pays them; how to dispute charges; monthly or yearly fee obligations; etc. Here are a few disadvantages to keep in mind. 1. Payments are not refundable While the advantage to residents is that they don't have to pay it all right away, the disadvantage is that they won't be refunded for their payments. 2. Disputes may be more difficult to resolve Since security deposit alternative programs involve a third party, you must involve another agreement with the lease and contracting stage. If there is an eventual dispute, it may be tough to get it resolved. Residents may not be held accountable in the way you and your investor need. Or, from the resident side, they may not get the service they want. 3. Security deposit alternatives don't save money Some products may seem like they're advertising dollars saved. But ultimately, these alternatives aren't intended to save money. They simply help residents keep money in their savings for a longer period of time, rather than making one big deposit all at once. Despite these disadvantages, we've seen security deposit alternatives pick up in popularity recently. As long as residents, investors, and PMCs know exactly what is and isn't promised, it can be a benefit to everyone involved. ‍ How 1,000+ Professional Management Companies Create Triple Win Experiences Security deposit alternatives are an innovative solution that solves problems for residents, investors, and property managers. For residents: A quality alternative lowers the barrier for residents and gives them more choice and agency in the rental process. For investors: A quality alternative can boost your listings’ marketability and reduce vacancy costs. For property managers: A quality alternative with more relevance for residents and investors – creates new value with an opportunity to monetize and eliminate the administrative pains of traditional deposits. That’s what we call a triple win! Learn more about how we create resident experiences that people pay and stay for – and share your trips and tricks in our Facebook Group!

December 1, 2023

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How to Screen Potential Tenants: Tips for Property Managers

Screening tenants is an essential part of a property manager’s job. But all too often, the approach is strictly transactional: Forms must be scanned and uploaded, data must be entered manually, and property managers and tenants alike can find the process cumbersome and frustrating. This legacy approach isn’t enough in today’s fast-moving experience economy. Companies like Google, Uber, and Amazon have changed how consumers think. Convenience isn’t a luxury anymore; it’s an expectation. And for a property management company, convenience can be a strategy. When approached through the lens of a holistic experience, tenant screening is one of the best ways to set yourself apart. Related: State of Resident Experience Study How to Screen Potential Tenants The first step to improving a process is to ensure you can structure it. What follows is a best-practice approach to tenant screening, complete with tips for success at every step. Related: Property Management Laws and Regulations by State 1. Understand tenant screening laws With a Triple Win mindset, PMs will seek tools that help them remain objective and fair to all applicants. That’s why every professional PM should be familiar with tenant screening laws in their area. Tenant screening laws are regulations put in place to protect tenants from discrimination, unfair eviction, etc. They govern interactions between real estate investors, property managers, and tenants. One of the best-known regulations is the Fair Housing Act, which protects tenants from discrimination on the basis of: Race Color Religion National Origin/Ethnic Background Gender Familial Status Mental/Physical Disability 2. Create tenant screening criteria Creating tenant screening reports is an important part of the rental property management process. Here are the steps to take: Define your target market: Identify the type of tenants you want to attract based on factors such as property location, size, price, and amenities. Set minimum requirements: Determine the minimum criteria that all potential tenants must meet, such as a certain credit score through ResidentScore or other tools, or income level. Consider additional factors: Other factors may be important to you, such as employment history, rental history, criminal background, and references. Establish a scoring system: Create a system to evaluate potential tenants based on the criteria you've established. For example, you may assign points for a positive credit history or deduct points for a criminal record, taking care to evaluate each person individually and fairly. Apply the criteria consistently: Ensure that you apply the screening criteria consistently to avoid discrimination and potential legal issues. Review and update regularly: Review and update screening criteria regularly to ensure that they remain relevant and effective for your rental property. 3. Check credit report and background Some screening providers are leveraging financial data APIs or "open banking" tools to automate income and employment verification. Tenant screening services like Plaid, Finicity, Pinwheel, and more are being applied to rental screening and replacing manual document upload and review. You can also find tools for getting a full credit report and credit background. Credit reporting should be compliant with the Fair Credit Reporting Act (FCRA). As identity fraud becomes more prevalent, identity verification tools are becoming more sophisticated. Some can even effectively identify past rent transactions in the bank account ledger. Most of these tools are being built for large apartment operators, but more innovation is coming to SFR, too. Second Nature’s Resident Benefits Package includes a $1 million identity protection service and credit building for tenants. These programs protect your tenants and help attract people who want to build responsible financial security. 4. Verify employment and income A big question on every PM’s mind is how to evaluate a prospective tenant’s ability to pay rent. Is income what matters? Credit history? The cash balance a tenant carries? Or just their history of prioritizing rent payments? The traditional (and oversimplified) answer is to slap on the widely accepted income-to-rent ratio of 3-to-1 or to look for a specific credit score. But neither of these tell the whole story of a tenant’s ability, or even likelihood, to pay rent and to pay on time. A much more telling number is a potential tenant's net income. Net income is true spending power. A net income of 2.5 or 3 times the monthly rent is a good starting point. But how do you quickly verify this information? Pay stubs will work, but experienced property managers know a simple pay stub template is a Google search away. This is where an automated income verification tool can provide an advantage, reliability, and speed. You’ll have much more accurate insight into tenants’ ability to pay rent and get them verified in much less time. 5. Review rental history and evictions As a follow-up to background checks, property management companies should have a process for reviewing an applicant’s rental history and potential evictions. Don’t just accept a letter from previous landlords – call and ask about their experience. Getting their perspective is one of the best ways to check on rental and eviction history. 6. Check criminal record with multi-state search When it comes to tenant screening, one crucial aspect is conducting a criminal record check that includes a multi-state history report. This step is vital to safeguard you and your team from legal headaches or disruptions down the road. A multi-state search provides a broader view of an applicant's history, as it covers more than just the state they currently reside in or are applying from. This is particularly important because individuals may have lived or committed offenses in different states. By implementing a comprehensive background check that spans multiple states, you can uncover any criminal history that might not be evident in a local or state-only check. This process helps in making informed decisions about potential tenants, ensuring you're not inadvertently overlooking important information that could affect the security of your property or the neighborhood. Of course, this doesn't mean denying anyone with a criminal record. Fair housing laws will have established rules on this that property managers should know well for their area. 7. Interview tenants before signing a lease Property managers should ensure someone on their team conducts an interview with potential tenants, particularly in SFR property management, where lease terms are usually longer. Here is a list of questions that property managers may consider asking potential tenants during the screening process: What is your current occupation and monthly income? Have you ever been evicted from a rental property or broken a lease agreement? How long have you been at your current job, and what is your employer's contact information? Do you have any pets, and if so, what type and how many? What is your desired move-in date and lease length? Will you have any roommates or co-tenants, and if so, what are their names and contact information? Have you ever filed for bankruptcy or had any outstanding debts? Do you have a good rental history, and can you provide contact information for your previous landlords and previous addresses? Are you willing to undergo a tenant credit check and background check as part of the application process? Again, please note that investors and property managers should be careful not to ask discriminatory questions that could violate fair housing laws. Additionally, it may be helpful to provide potential tenants with information about the property, such as move-in costs, lease terms, and any rules or restrictions that apply to the rental property. After all, the property manager’s goal is to create an experience that caters to tenants in order to create the best value for their investors. 8. Follow a fair policy when accepting or rejecting tenants A consistent and objective set of screening criteria goes a long way to simplifying the acceptance or rejection process. Here are some steps to follow when accepting or rejecting rental applicants: Evaluate the applicant's information: Review the application and any supporting documentation, such as credit reports, employment verification, and rental history. You may also charge an application fee. Compare the applicant to your screening criteria: Compare the applicant's information to your established screening criteria and determine if they meet the minimum requirements. Consider any additional factors: Consider any additional factors that may impact the applicant's suitability as a tenant, such as their behavior during the application process, their responsiveness to communication, and any references provided. Communicate your decision: Communicate your decision to the applicant in writing, providing clear and specific reasons for your decision. Be sure to also inform the applicant of their rights to request a copy of an applicant’s credit report and to dispute any errors. Keep accurate records: Keep accurate records of your tenant screening process, including copies of all applications and supporting documentation, as well as notes on your evaluation of each applicant. Maintain consistency: Apply your screening criteria consistently to all applicants to avoid any potential discrimination claims. Remember, it is essential to treat all applicants fairly and to follow fair housing laws and state-specific regulations to avoid discrimination. Example Tenant Screening Checklist Here is an example of a comprehensive tenant screening checklist template, based on the best tenant screening services: 1. Basic Information: Full name Current address Contact information (phone, email) 2. Income and Employment: Proof of income (pay stubs, bank statements, tax returns) Employment history (length of employment, job title, employer contact information) Gross income (should be 3 times the monthly rent) 3. Credit History: Credit score (should be above 650) Credit report (to check for bankruptcies, late payments, collections) Outstanding debts 4. Rental History: Previous rental history (landlord contact information, length of stay, reason for leaving, address history) Evictions (any prior evictions, eviction records, eviction reports) 5. Criminal Background: Criminal history (felony convictions, sex offender status) 6. References: Personal references (contact information for at least two personal references) Professional references (contact information for at least two professional references) 7. Other Factors: Pet ownership (type, size, breed, and number of pets) Smoking policy (whether or not smoking is allowed in the rental property) Other specific requirements (e.g., credit checks, criminal background checks, rental history checks, etc.) The criteria on this checklist may vary based on the specific needs and requirements of the investor or property manager – and local laws. Related: Tenant Screening Checklist: Free Template and Form Example Benefits of Vetting Tenants Why screen tenants? The answer might seem obvious. You can Google “tenant screening,” and you’ll see any number of articles giving the common reasons for screening tenants: protecting your property, protecting your financial situation, etc. And yes, all of that is important. But elite property managers know that protecting yourself is the bare minimum. The best PMs consider the tenant screening process their first chance to make an impression and win the best tenants. Success is about creating and delivering the best experiences for tenants, investors, and property managers. At Second Nature, we call this the Triple Win. Property managers should be thinking: “How do we design the screening process for a Triple Win?” Here’s what we mean by that. A win for investors What do real estate investors want? Bottom line: To maximize their investment by having all residences occupied by good tenants. But there’s tension when you’re aiming to maximize investment. Investors have two primary needs when filling a rental property, and they can seem opposed: How do I select a quality tenant who will pay rent on time, stay a long time, take care of the home, and be generally cooperative? How do I fill the property as fast as possible? Every day a home is vacant, it generates zero revenue and incurs costs. Investors win when they have a screening process that can deliver quality tenants, fast. A win for tenants What do tenants want? Bottom line: To be approved quickly and easily. Think about when you’re applying for a job. The employer honestly can’t work too fast to get you in a good seat. The faster, the better. As we mentioned before, convenience is no longer a luxury; it’s an expectation. Tenants want to move quickly toward the lease agreement without too much effort. Therefore, building convenience into the screening process is a crucial strategy for a successful property manager to attract the best business. A win for property managers Professional property managers stand out by providing experiences that are consistent, convenient, and rewarding for investors and tenants. But they also need to design the process with the experience of their team in mind, too. PMs focused on a Triple Win can align qualified tenants’ desire for convenience with an investor’s desire to be protected from risky applicants and vacancy costs. As if that’s not enough of a challenge, they also need to accomplish this in a way that complies with fair housing regulations. Therefore, an enterprising property manager will design the screening process to create experiential value and better monetize each property. Ultimately, a Triple Win for tenant screening is introducing speed, accuracy, and convenience to a legacy process. Let’s dive into that concept in the next section. Property Management Tenant Screening Services Tenant screening services can help manage the identity verification process, an assessment of the prospective tenant's financial situation, and evaluate any factors that may be relevant. They typically access information from a wide variety of sources to compile a current and precise tenant portrait. Most tenant screening services offer their services online, where property managers can supply the identifying information of an applicant to get a full report within minutes. Here are just a few: National Tenant Network TransUnion Experian Findigs Rent Butter Snappt Verifast Which Tenant Screening Solution is Right for You? When selecting a tenant screening solution, begin by assessing your specific scope as well as budget constraints. Bear in mind that some solutions are limited in scope in that they primarily provide credit reports, while others may be geared toward landlords rather than property managers. In all cases, seek out providers with reputable customer support (as indicated on popular software comparison sites as well as app download stores) and user-friendly interfaces to streamline the screening process. Additionally, consider any legal requirements or industry standards relevant to your situation. By weighing these factors, you can select a tenant screening solution that aligns with your requirements and helps mitigate some of the risks associated with property management. How Does Second Nature Help With the Tenant Screening Process? Like we’ve said – and as most PMs recognize – legacy “tenant screening” systems are the worst. They’re clunky. They’re long and tedious. They require a ridiculous amount of manual work to upload pay stubs or other documents. Think about how seamless an experience it is to find a listing on Zillow. It works smoothly on desktop or mobile, and the app is clean, easy, and responsive. You can find 3D tours, self-showings, and all kinds of innovations happening in the discovery process. Then you hit "click to apply.” Whomp whomp. Suddenly, you hit a mediocre (or worse!) experience that feels a decade old or more. It can take days from that initial button click for submission, review, and official approval/declination. But imagine if this was all designed through an experience lens instead of an accounting or transactional lens. PMs who want to stand out will have a screening process that works like an Easy Button. So how might we make it as easy as possible for the best tenants to get approved same-day by the best property managers in the country? Think about your current screening system. You can see if a tenant paid rent, but can you see if they changed their filters, reported minor maintenance issues, how they treated and communicated with staff, what condition they left the property in, and the security deposit status? Do you have a Resident Benefits Package that attracts tenants who care about good habits and supports them in those habits? The screening process sets the tone and the standard for the rest of your relationship with a tenant. Property managers can be part of helping build good habits right from the start. Learn more about what tenants are looking for today and how PMs are innovating in response.

November 16, 2023

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Preventive Maintenance Checklist for Property Management

A big part of property management is prevention. Property managers anticipate issues, plan for problems, and execute solutions. For some, a key part of this prevention is to develop a property management preventive maintenance checklist. For multi-family property managers, a regular preventive maintenance check is standard–and easy. Their properties are often all contained to one apartment building or community, and it’s easy to do a walkthrough to ensure everything is as it should be. For single-family property managers, it gets a lot more complicated. With scattered-site properties, regular inspections are impractical and expensive. In fact, one of the best ways to approach prevention is to help equip residents to take preventive measures themselves. At Second Nature, that’s our approach: “How do we make it easy for residents to handle preventive care of the property?” In this article, we’ll explore both approaches to preventive maintenance: Doing inspections as a property manager – or finding solutions where residents support the process. Let’s dive in. What is Preventive Maintenance? Preventive maintenance is a proactive approach to keeping a property in good condition with the purpose of preventing unexpected failures and maximizing longevity. This type of maintenance encompasses a broad range of activities, from routine inspections (more common in multifamily) to air filter delivery services that keep HVAC systems running smoothly. By implementing preventive maintenance tactics, property managers aim to prolong the lifespan of property components, maintain property value, and provide a safe, functional, and appealing living environment for residents. What is a Preventive Maintenance Inspection – and Who Conducts It? A preventive maintenance inspection is a regularly scheduled, systematic evaluation of a property designed to identify and rectify any emerging issues before they escalate into serious problems. In other words, a preventive maintenance inspection is like a health check-up for a property. A well-documented inspection also provides a record of maintenance that can be valuable for insurance claims, move-outs, etc. Generally, SFR property managers find themselves in three different camps when it comes to property inspections: Those who visit sites only when an issue arises. Those who conduct scheduled annual preventive inspections, whether there are issues or not. Those who conduct biannual or seasonal preventive inspections, whether there are issues or not. In fact, we conducted a casual Facebook poll to see what single-family property managers said about the frequency of their property inspections. Most PMs who responded said they conduct an annual inspection. A smaller amount said they conduct two inspections per year, and another group said they do it only when needed. A very small amount of property managers polled said they conduct quarterly inspections. (To get more community insights and tips like this, join our Triple Win Facebook Group.) But there’s also a fourth option: Those who rely on a partner who helps manage prevention for them. There is so much residents can do themselves to prevent larger issues from ever developing – they just need a little support. For example, if a resident is changing their air filter on time, the property manager is going to get fewer HVAC tickets, and the HVAC system is going to last longer. If you can provide scheduled air filter delivery, residents can stay on top of their filter changes. Whichever of the camps you fall into, we want to provide you with resources in this article to make preventive maintenance easier. If you’re the type of property manager who prioritizes regular preventive maintenance inspections, we have a checklist template for you below. If you’re the type of property manager who prefers to react when issues arise (often more cost-effective), we have some suggestions for how to help residents manage preventive measures on their own. What to Include in a Preventive Maintenance Checklist Let’s say you do prioritize regular inspections. Crafting a preventive maintenance checklist for property management is all about anticipating needs and averting potential issues before they arise. Building your checklist begins with a thorough assessment of the property's unique features and vulnerabilities. By understanding the life cycle of various components of a property across the seasons – from HVAC systems to appliances – you can prioritize tasks and schedule maintenance in a way that minimizes wear and tear. Your checklist will likely include the following categories: Structural Maintenance Electrical Systems Plumbing & Water Systems HVAC Systems (Heating, Ventilation, and Air Conditioning) Appliances (if provided) Lawn & Outdoor Areas Pest Control Safety & Security Systems Interior Checks Miscellaneous (Garage, waste disposal, etc.) Sample Preventive Maintenance Checklist for Property Management Companies With input from OnSightPROS, we’ve built a preventive maintenance checklist template for single-family rental property management companies. Use this template as-is or tweak it to fit your property needs! If you want a downloadable and more in-depth template for all types of rental inspections, check out our original post on rental inspection checklists and Get the download here. Structural Maintenance Roofing: Inspect for leaks, damaged tiles, or shingles. Check gutters and downspouts. Foundation: Check for cracks, water damage, or shifting. Walls and ceilings: Look for cracks, dampness, and signs of mold. Electrical Systems Safety checks: Ensure that outlets, switches, and wiring are in good condition. Lighting: Regularly test all indoor and outdoor lighting fixtures. Inspect circuit breakers and panels. Plumbing & Water Systems Drains and pipes: Check for leaks or buildup. Water heater: Test hot water temperature and pressure relief valves and inspect for signs of wear. Faucets and fixtures: Ensure proper flow and check for leaks. HVAC Systems (Heating, Ventilation, and Air Conditioning) Filters: Ensure they are up to date. With Second Nature’s Air Filter Delivery, you’ll have the date stamped right on the filter itself. Ductwork: Check for mold or leaks. Seasonal checks: Ensure the heating system is ready for winter and cooling for summer. Appliances (if provided) Oven, range, microwave: Check for cleanliness and ensure they are working efficiently. Refrigerator: Check coils and inspect seals. Washer and dryer: Inspect hoses and ensure the resident is keeping lint and drainage clean. Lawn & Outdoor Areas Landscaping: Ensure that the landscaping is tidy and up to HOA standards, if applicable. Paths and driveways: Check for cracks or tripping hazards. Pools: Ensure safety measures are in place. Pest Control Notice any signs of pests With Second Nature’s Property Management Pest Control, you can be sure residents can call a professional immediately if they ever have issues. We handle it for you. Safety & Security Systems Smoke and carbon monoxide detectors: Ensure residents have kept up to date and they are installed properly. Fire extinguishers: Check expiration dates and ensure they're easily accessible. Emergency exits and paths: Ensure they're clear and well-marked. Interior Checks Floors: Look for damaged tiles, caulk problems, carpet wear, or wood floor issues. Windows and doors: Ensure they open and close smoothly, and check seals. Miscellaneous Garage and parking areas: Check for proper lighting, security, and cleanliness. Waste disposal: Ensure trash bins are clean and in good condition. The Importance of Preventive Maintenance Did you know that something as simple as getting air filters delivered on time can reduce HVAC costs by hundreds of dollars annually? More on that in a minute, but it’s clear that for property managers, preventive maintenance isn’t just about keeping the property in good shape—it's a strategic approach that yields all kinds of benefits. By prioritizing prevention, you can: Minimize costly repairs: Regular maintenance can prevent small maintenance issues from escalating into expensive emergencies. Extend asset longevity: Helping residents proactively care for components like HVAC systems extends their lifespan, saving money in the long run. Enhance resident satisfaction: Supporting a resident in maintaining their property means fewer complaints and issues, leading to higher retention rates. Ensure safety: Regular checks keep safety hazards at bay, reducing the risk of accidents and liability. Improve property value: Consistent upkeep maintains or even increases the property's market value. Stay compliant: Keeping up with building codes and safety regulations is non-negotiable, and preventive maintenance ensures compliance. By incorporating a preventive maintenance strategy, property managers not only safeguard the property's physical health but also its financial viability and desirability in the market. It's a proactive measure that resonates well with residents and investors alike. Best Tools to Support Preventive Maintenance Here’s the big question: How can property managers for single-family homes make preventive maintenance easier? Scattered-site properties don’t lend themselves to regular inspections. So, the best solution, as we mentioned above, is to help your residents do it themselves. Here are three of our favorite products to get that done. Second Nature We’ve built a Resident Benefits Package with proactive property management in mind. Each feature – from renter’s insurance to on-demand pest control to air filter delivery – aims to address ongoing needs and prevent common issues from escalating. Let’s take air filter delivery as an example. In the largest HVAC data study of its kind, filter delivery service reduced HVAC ticket requests by 38% Just by including a filter subscription for your residents, you can help them cut energy costs and ensure your HVAC system lasts for the long term. Learn more about all of the features of our Resident Benefits Package and how it delivers results for residents, property investors, and property management companies. RentCheck RentCheck is a property inspection app built to help residents do inspections on their own. The property manager can request and track routine inspections from the resident. You can set up any cadence you want and customize the self-guided inspection requirements. RentCheck will fully automate reminders and support residents in completing a video inspection that then gets sent to you as a shareable report. zInspector zInspector is another very popular rental inspection app in the SFR property management space. Like RentCheck, property managers use zInspector to schedule, customize, and receive inspections conducted by residents themselves. The app also includes a toolkit with an evolving set of property and task management tools. You can get 360 photos and virtual tours with a compatible 360 camera and printable, customizable inspection reports. FAQs Q: What are the benefits of preventive maintenance? Preventive maintenance offers a multitude of benefits, including: Cost Savings: It reduces the likelihood of incurring expensive emergency repairs and extends the life expectancy of property assets. Efficiency: Regular maintenance ensures that all systems and appliances are running at optimal performance, which can lower energy costs. Tenant Retention: A well-maintained property leads to higher tenant satisfaction, which can decrease turnover rates. Safety: It helps identify potential safety issues before they become hazardous, promoting a safer living environment. Value Preservation: Ongoing care maintains and can enhance the property's value over time. Compliance: Ensures that the property remains in compliance with the latest building codes and safety regulations. Overall, preventive maintenance is essential for maintaining a property's integrity, ensuring tenant satisfaction, and optimizing operational budgets. Q: What is included in basic preventive maintenance? Basic preventive maintenance for property management typically encompasses: Routine Inspections: Regularly checking the structural integrity of the property, including roofs, walls, and foundations. HVAC Maintenance: Ensuring heating, ventilation, and air conditioning systems are clean and functioning properly. Plumbing Checks: Looking for leaks, clogs, or wear in pipes and fixtures. Electrical System Audits: Inspecting electrical panels, wires, and safety systems to prevent malfunctions. Groundskeeping: Checking outdoor areas, including landscaping, gutters, and drainage systems. Appliance Upkeep: Servicing provided appliances to prevent breakdowns and extend their lifespan. Safety Inspections: Verifying that all safety equipment, like fire extinguishers and smoke detectors, is in working order. These tasks are designed to identify and address issues before they develop into more significant problems, helping to ensure the property remains safe, functional, and appealing to tenants. Q: What’s the ideal schedule for preventive maintenance? The ideal schedule for preventive maintenance can vary depending on the specific needs of a property, but a general guideline is as follows: Weekly/Monthly/Quarterly: Regular checks on a weekly to quarterly basis are more common for multifamily properties and apartment buildings, with quick checks on high-usage areas and equipment, such as communal spaces and gardening upkeep. Quarterly maintenance inspections could include more in-depth inspections of HVAC systems, plumbing and electrical systems, and seasonal preparations. Annually/Seasonally: A small number of SFR property managers will conduct seasonal or semi-annual inspections. A few more conduct annual inspections (unrelated to move-in or move-out, which always includes inspections). These are more in-depth inspections to keep an eye on potential issues.

November 15, 2023

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Property Maintenance Guide for Property Managers

Property management maintenance is one of the most important parts of the resident experience. But it’s also costly and difficult to control. We’ve heard from hundreds of property managers that maintenance can be one of the most unpredictable parts of their job – and one of the biggest headaches for residents, property managers, and real estate investors. Triple headache! Of course, the unique frustrations and challenges of rental property maintenance also mean that an effective strategy can become one of the most outstanding differentiators for a property management company. So how do leading PMCs take their routine maintenance practices to the next level? How can PMCs turn that triple headache into a triple win? Here’s what we’ve learned from years of working with PMCs. What is property maintenance? Property maintenance is everything involved in ensuring your properties are in excellent shape and any issues are repaired in a timely manner. Property managers take responsibility for maintenance in most cases, and their tasks include both preventive and responsive maintenance. Property maintenance may include: Resident maintenance requests Servicing and repairing HVAC systems Pest control Landscaping Painting and repairs Maintenance is critical to the resident experience, to keeping a property fully functional, and to ensuring safety and quality of life. Failure to follow through on maintenance can result in serious consequences. Property managers must balance their residents' needs and their investors' goals. For example, what if an investor isn’t interested in putting a whole lot of maintenance or repairs into a specific property – but the resident wants a higher level of service? Another layer of complexity is the round-the-clock nature of maintenance tasks. You don’t know when a roof will spring a leak, an HVAC system will go haywire, or a dishwasher will give up the ghost. Property managers have to juggle on-call hours, after-hours, increasing work orders, and emergencies all the time. Benefits and challenges of property management maintenance That’s all easier said than done! Property management maintenance is uniquely challenging. It’s unpredictable, almost always urgent, and involves several stakeholders and fluctuating pricing. Related: Best Property Management Maintenance Software Bottom line: How do you build solutions that support your team, the resident, and your investor? Let's look at both the benefits and challenges of property management maintenance. Benefits of property management maintenance: Extending the life of properties and equipment Reduced costs Ensuring resident health and safety Boosting the resident experience with high-quality homes Avoiding liabilities and accidents Increasing property value Happier tenants! Challenges of property management maintenance: Prioritizing reactive and preventive maintenance Increased expenses and maintenance costs Delegating tasks to your team Managing resident expectations After-hours and emergency work is 24/7 Balancing investor's goals and resident's needs Related: 10 Property Management Goals to Set for the Year (with examples) Examples of maintenance in property management Here are some top examples of property management maintenance company services for single-family homes. Spring property maintenance checklist: Check gutters and downspouts for blockages left over from the winter Check interior for any mold or mildew growth Start prepping landscaping for summer with new flowers or shrubs Summer property maintenance checklist: Clean window wells, gutters, and downspouts Find and fix any gaps in windows, doors, and walls (to keep out pests and ensure HVAC efficiency) Maintain yard and landscaping if that's within your responsibility Increase watering frequency Prune trees and any hazardous limbs Lawn care Check outdoor lighting Pressure wash and repair outdoor areas/decks Fall property maintenance checklist: Check the roof and exterior for leaks or repair needs Clean chimney for cold weather Clean gutters and downspouts again Prep landscaping for winter Remove dead leaves, branches, etc. Prep sprinkler system for winter Winter property maintenance checklist: Ensure roof is in good state for winter Check batteries in smoke and carbon monoxide detectors Ensure pipes, windows, and doors are insulated Cover and winterize outdoor areas, including pools and pipes What to look for in property maintenance workers? When property management companies consider hiring in-house maintenance workers or contracting with property maintenance services and technicians, there are several key qualifications and skills to look for. These not only ensure efficiency and quality in maintenance tasks but also contribute to the overall safety and longevity of the property. Here’s a checklist of what to look for: Experience in Managing Repairs: Look for a proven track record in handling a variety of repair tasks. This includes the ability to diagnose issues quickly and provide effective, long-lasting solutions. HVAC Systems Expertise: Essential knowledge in maintaining and repairing HVAC systems is crucial, given their complexity and how important they are to resident comfort. Boiler Maintenance Skills: Expertise in maintaining and repairing boilers, especially in regions with colder climates where heating systems are in constant use. Installation Abilities: Proficiency in installing various types of equipment—ranging from basic fixtures to complex machinery. Electrical and Plumbing Knowledge: A solid understanding of basic electrical and plumbing systems ensures that routine issues can be addressed promptly and safely. Certifications and Training: Relevant certifications or completed training courses in property maintenance or specific systems (like HVAC or electrical work) add credibility and assure competence. Problem-Solving Skills: The ability to think on their feet and creatively solve unexpected problems that arise during maintenance work is key. Communication Skills: Clear communication with property management team and tenants is essential, especially when coordinating repairs and addressing tenant concerns. Attention to Safety: A strong focus on safety protocols to prevent accidents or property damage, including adherence to all relevant regulations and guidelines. Customer Service Orientation: Since maintenance technicians often interact directly with residents, a friendly demeanor and strong customer service skills are important for maintaining tenant satisfaction. By ensuring that your property maintenance workers or contracted technicians meet these criteria, property management companies can maintain high standards in property upkeep, leading to satisfied tenants and well-maintained properties. What should an ideal property management maintenance solution have? We’ve spoken with leading property managers across the industry and collected some of their best tips for taking the puzzle of property maintenance and delivering next-level service and experiences. Here are three key steps they’ve shared for leveling up when it comes to property maintenance. 1. The right team Getting the right “who” is critical before addressing the “how.” We spoke to leading property management consultant Kevin Hommel about what he looks for in his property management team. He looks for people who are proactive, self-driven, and resilient in the face of complex problems. Maintenance is no exception. A self-driven team will always aim to be proactive rather than reactive. Hommel says: “I would rather find somebody who is going to come in and hustle – even if I have to teach them everything about property management – than find somebody who's a property management expert but has the wrong attitude. It's going to be a completely different experience.” The benefits of finding the right full-time or part-time team are twofold: First, you’ll produce better work and better service. Second, a trustworthy team helps you focus on bigger strategic opportunities. As a property management business owner, you should be free to focus on 10X opportunities rather than get bogged down in day-to-day tasks. Peter Lohmann, Co-founder & CEO of RL Property Management, says it this way: “In property management, a lot of us are in the habit of wanting to know what's going on at all times – every rental application, every maintenance request, works orders, every disbursement amount. But I would challenge everyone to step back from that and ask yourself, ‘Why?’ The need to ‘stay plugged in’ is not going to help you unlock growth for your company. Time to work on 10x opportunities instead.” By hiring a team you can trust, you’re setting your residents up for success. You know they’ll be taken care of, and you can focus on higher goals to improve your resident experience overall. 2. A clear process for managing requests After setting up your team – and before we get to the tools you can use to support them – we need to talk about the process. Every property manager we’ve spoken to is bullish when it comes to getting your processes right. Lohmann again: “(It’s important to) do things in a standard way throughout your business. The more exceptions and one-off arrangements you make with the property owner and tenants, the harder this becomes. Your priority should be to standardize all your contracts and operating procedures so you can innovate around a small number of core processes that apply to every unit you manage.” This is more than just having a maintenance checklist. The best way to build a process is to approach it from the lens of the resident experience. The most successful property managers set up maintenance processes by asking themselves what the resident wants and needs: What’s the easiest way for a resident to report an issue? In what way do residents like to communicate with me or hear from me? How can I best keep residents informed? How can I bring speed and convenience to residents? Using an experience lens to build or update property maintenance processes can help you see new opportunities. 3. The right tools and technology Automation and AI are some of the newest ways to support your team and improve functionality. No-code tools and app integrations help connect workflow, client management, communication, and task tracking. No-code tools are products that enable those of us with no coding experience to build digital solutions for every part of our workflow. Property managers can use no-code tools to design their websites, build online content, create email campaigns, or set up automated task tracking, communication, and more. In terms of property maintenance, PMCs can now use accounting platforms with native portals for maintenance requests or adopt maintenance solutions platforms like Meld. These solutions offer customizable automation where you can track tasks, deadlines, time, vendors, costs, and employee responsibilities. With just a few clicks, automation helps cut out manual work like: Creating a New Property Checklist every time you add a new door Populating data fields in your CRM Assigning the correct tasks to the correct people Sending an email to a property investor with updated information Sending maintenance reminders Tracking safety checks and code enforcement Etc. Property management software and partner solutions run the gaut. They can include features like: Tenant portals for maintenance requests and more 24/7 and after-hours call center services Accounting platforms Self-help video libraries and knowledgebase platforms Technology ultimately brings greater speed, convenience, and ease to you and your residents. 4. A resident benefits package Whether you’re already implementing automation or if that feels a long way off, we still haven’t addressed one of the best tools for boosting resident experience: the resident benefits package or RBP. An RBP is considered by many property managers as the most powerful, profitable step to impact the resident experience. And it is the only one that generates revenue while also creating operational efficiency. RBPs provide tools like filter delivery service, identity protection, rewards programs, on-time rent incentives, credit building, move-in concierges, insurance, and more. Here’s just one example: The National Rental Home Council (NRHC) surveyed 7,772 single-family residences over 18 months to analyze the frequency of resident HVAC service requests with and without HVAC filter delivery service. Second Nature delivered HVAC filters every 60 to 90 days in a date-stamped box with illustrated instructions and sent emails with tracking information and educational content before each delivery. Overall, there was a 38% reduction in HVAC-related ticket requests among the group that received filter delivery—a result achieved without creating any additional work for the property management company. Resident benefits packages help standardize benefits in a cost-effective way across all your properties. With an RBP, you know every resident is getting a level of service that feels high-touch but doesn’t create any extra work for your team. RBPs strengthen communication, transparency, self-service, and speed – in other words, the resident experience and relationship. How to effectively manage a property maintenance team Managing a property maintenance team efficiently is key to ensuring your properties are well-cared for, and your residents remain satisfied. From scheduling tasks to fostering teamwork, every aspect plays a crucial role. In this section, we'll break down essential tips into actionable strategies to help you lead your maintenance team effectively. Establish Clear Communication Channels Effective communication is the backbone of successful team management. Establishing clear channels for reporting issues, discussing solutions, and sharing feedback ensures everyone is on the same page. Use digital tools like email, messaging apps, or property management software to streamline communication. Implement a Scheduling System A well-structured scheduling system is crucial for organizing maintenance tasks. Make sure your maintenance team uses digital calendars or maintenance management software to allocate tasks, set deadlines, and track progress. Ensure their schedules are flexible enough to accommodate emergency repairs while maintaining routine maintenance work. Prioritize Tasks Based on Urgency and Importance Not all maintenance tasks carry the same weight. Prioritize issues that directly impact resident safety and comfort, such as HVAC problems or plumbing leaks. Regular maintenance can be scheduled around these more urgent tasks to ensure efficiency without compromising on critical repairs. Use Technology for Efficiency Leverage technology to automate reminders, maintain records, and manage work orders. Property maintenance software can significantly reduce manual administrative work. Regularly Evaluate Performance Conduct regular assessments of your maintenance vendors. Use these evaluations to identify areas for improvement, acknowledge accomplishments, and set goals for future growth. Encourage Feedback from Residents Residents are often the first to notice maintenance issues. Encourage and facilitate easy ways for them to report problems. This feedback can be invaluable in identifying areas that need attention and enhancing resident satisfaction. Plan for Preventive Maintenance Instead of always being reactive, schedule regular preventive maintenance checks. This proactive approach can significantly reduce the frequency of emergency repairs and extend the life of property assets. Building in solutions like a Resident Benefits Package can bring residents on board with prevention strategies, too. Balance Workload Fairly Ensure that the workload is evenly distributed among team members if your team does the maintenance work. Overburdening certain individuals can lead to burnout and reduce the overall efficiency of the team. How does a Resident Benefits Package help reduce maintenance needs and costs? Managing single-family properties presents unique challenges, particularly due to the fact they're generally scattered-site management. This setup can make regular maintenance a logistical and financial burden for SFR property managers. But a well-structured, fully managed Resident Benefits Package (RBP) can make a huge difference in alleviating those challenges. At Second Nature, we built an RBP with integrated solutions that support and empower residents to take better care of the properties themselves. This helps reduce maintenance needs over time. Take air filter delivery: Simply subscribing to HVAC filter delivery can reduce HVAC ticket requests by 38% and save hundreds in energy bills. Another example is pest control. On-demand pest control can ensure residents deal with pest issues immediately. Instead of paying for expensive prevention, you can be sure actual issues are dealt with before they escalate. Or, consider resident rewards. With a built-in rewards program, property managers can customize the behaviors they want to encourage. Small preventive tasks or maintenance checks can be included in those incentives. Maintenance, tracking down vendors, invoicing work orders, etc., will always be a part of the property manager's life. But with an RBP, you can significantly cut down on the time and money you spend on a maintenance team. Why property maintenance can make or break your success as a PMC You’ve heard this from us before, and you’re going to hear it again – it’s all about the resident experience. Retention depends on it. Consumers today are looking for products that can offer them: Ease and convenience: Thanks to companies like Uber and Amazon, consumers are now used to having solutions at their fingertips – or the click of a button. Personalization: With our data everywhere, we’ve all become accustomed to brands that know us more intimately than ever before. Automation or speed to answer: Smart homes and connected devices can solve problems remotely and quickly. Even though PMs aren’t robots, we see more PMs solving with digital solutions and proactive services like resident benefits packages that anticipate and deliver on residents’ needs before they become problems. The modern resident has different expectations than the generation before. The “convenience economy” has come for us all. Residents don’t just expect to have maintenance issues resolved. They expect management services to provide a certain level of ease, comfort, familiarity, and convenience. Of course, maintenance work has obvious urgency: Nobody wants to live with a clogged toilet, a leaky faucet, no hot water, backed-up gutters, etc. But emergency repairs are now the minimum that property managers provide. Property management maintenance is integral to the resident experience – and one of the primary ways to set your business apart. We’re not just looking for “good enough” – we’re looking to answer the question: “How do we create experiences so good that residents never want to leave?” Regarding rental property upkeep, delivering on that question will involve many factors: Safety first: Safety is the baseline for all properties. If residents don’t feel safe, they are not likely to stay. Staying on top of carbon monoxide detectors, leaks, etc., is paramount. Timeliness: According to Ray Hespen, “the biggest leading indicator for resident satisfaction is speed.” Transparency: Whether through an online dashboard, text communication, or other tools, residents expect to know what’s going on with their homes. Preventive maintenance: We have to go beyond reactive maintenance. Processes that prevent issues from occurring can save time and money and boost the resident experience. We’ll talk about how resident benefits packages can deliver this for PMCs. First-time fixes: Nothing is more frustrating than getting something fixed only to realize the maintenance team didn’t actually resolve the issue. Communication: Residents don’t want to explain themselves or the problem several times to different parties like the property manager, the vendor, etc. Self-service: Many residents like the control and convenience of self-service options like air filter delivery or online payment portals. These are the characteristics we’re seeing across some of the most successful property management companies – the PMCs standing out from the crowd. How to reduce property maintenance costs Maintenance costs can quickly spiral if not carefully managed, but with strategic planning and smart practices, you can significantly reduce these expenses without compromising on quality or resident satisfaction. Let's dig into a few practical tips that will guide you on how to efficiently lower your property maintenance costs, ensuring your operations remain both cost-effective and top-notch. Implement Preventive Maintenance Proactive maintenance can significantly reduce long-term costs. By implementing services that protect key elements like HVAC systems, plumbing, and electrical circuits, you can prevent minor issues from becoming major expenditures. Services like air filter delivery create excellent return on investment when it comes to prevention like this. Use Energy-Efficient Solutions Invest in energy-efficient appliances, lighting, and HVAC systems. These not only reduce energy costs but also tend to have a longer lifespan and lower maintenance requirements. Consider LED lighting, energy star-rated appliances, and smart thermostats to boost efficiency and cut costs. Train Staff on Basic Repairs Equip your team with the skills to handle basic repairs in-house if it makes sense for you in terms of time and cost. Training staff to fix common issues like minor leaks, electrical faults, or appliance glitches can save on expensive contractor fees. However, ensure more complex tasks are left to professionals. Negotiate Contracts with Vendors Establish long-term relationships with trusted vendors and negotiate contracts for regular maintenance services. Buying services in bulk or agreeing to long-term contracts can often result in significant discounts. Ensure these vendors are reliable and offer competitive rates for their services. Monitor and Manage Inventory Efficiently Keep a close eye on your inventory of maintenance supplies if that's something your team manages. Bulk purchasing of frequently used items can save money, but be wary of overstocking, which can lead to waste. Use inventory management software to track usage and avoid unnecessary purchases. Optimize Use of Technology Leverage technology for maintenance management. Use property management software to track maintenance requests, schedule work orders, and monitor expenses. This can help in identifying patterns or areas where costs can be trimmed without compromising on service quality. Conduct Regular Financial Audits Regularly review and audit your maintenance expenses. This practice can help you identify areas where you may be overspending, spot inefficiencies, and adjust your maintenance strategies accordingly to ensure cost-effectiveness. How thousands of property managers are approaching the future of maintenance and resident experience A property manager’s ability to respond to maintenance needs proactively can have a massive impact on renewals and referrals. We’re sure every property manager has stories of how maintenance can make or break the resident experience and company growth. Innovative property managers set themselves apart by building teams and systems that go above and beyond for the resident experience to create a Triple Win. They create systems that proactively address maintenance, apply technology to support their teams, and provide fantastic benefits to residents. If you want to build a differentiated resident experience people pay for and stay for, learn more about our Resident Benefits Package or subscribe to our podcast for regular insights from the PMC world.

November 2, 2023

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Property manager meeting with future tenants

10 Strategies to Become a Successful Single-Family Property Management Business

Navigating the world of Single-Family Property Management requires a blend of industry know-how, proactive strategies, and a keen understanding of both investors and residents. What is a single-family property management business? At its core, the business revolves around managing standalone properties for individual property investors, ensuring the rental property is maintained, tenanted, and profitable. But how do you optimize for success in this space? In this post, we'll uncover 10 pivotal strategies to elevate your single-family property management business, from staying updated on industry trends to streamlining your operations for maximum efficiency. Related: Best Property Management Podcasts 1. Keep up with the trends in Single-Family Property Management The dynamic landscape of single-family property management is constantly innovating and growing in response to various economic, technological, and societal factors. Property managers in the single-family space (vs. multifamily properties or even commercial real estate) also tend to be entrepreneurial, innovative, and adaptive. It’s what we love about this community! But some "trends" have staying power, and the key to long-term success is identifying those and adapting your services to the modern consumer. Over the past decade or so, the way we do commerce and services has been upended by technology and the convenience economy. The same is true in property management. In the words of Jonathan Cook at Revolution Rental Management: “I think ten years ago, property managers were only concerned with collecting rent and keeping tenants from doing damage to properties. It was a much more adversarial relationship than it is today. Today, the best PMs know that resident experience is vital to minimizing vacancy and creating a resident that strives to be a higher quality tenant.” So, let’s look at several trends that have emerged that are shaping the industry’s direction. The Convenience Economy: Sometimes we call this "the Amazon effect." Consumers and residents alike are looking for the easy button. They're looking for everything from online rental listings they can scroll from their couch to online rent payment services that make paying as easy as the click of a button. Technological Advancements: Today, property managers are leveraging technology more than ever. From smart home systems that enhance resident experience to advanced, AI property management software that streamlines operations, staying abreast with technological trends is crucial. The key to staying on top of these transformations is to ask the right questions. Pay attention to general business trends. What are consumers demanding? What is new in technology that you could adapt to your business strategy? Running a property management business is just that: a business endeavor. Keep your eyes sharp on trends in commerce and get involved in the conversation of how that affects good property management. 2. Understand your ideal investors in single-family property management When diving into professional property management, just like any other business, it's essential to identify your ideal customer profile (ICP) early on. You will get so much further by "niche-ing down" than spreading your company too thin. What kind of property and client are you ideally set up for or prepared to work with? Once you define your target audience, you can then be ruthless in saying no to anyone who falls outside that definition. Here are a few ways to explore the various dimensions of property investor clients: Level of Experience: Property investors are not all created equal. Individuals get into property ownership for different reasons. You can see experiences ranging from an accidental landlord who never intended to be an investor all the way to a sophisticated or institutional investor, and every shade of the spectrum in between. It's very difficult to build a business that serves all customers across all levels of sophistication. They'll have different needs for how much education they need, how they want you to handle things, and how they want pricing to work. Property Types: You should also define what type of property you want to manage, which will help you assess if a new investor is a fit or not. We're assuming since you're reading this that you're interested in single-family rentals. But within that category, there is still so much variation. Are you looking to manage luxury homes with higher rent, lower demand, and longer vacancies? Are you more interested in workforce housing with more demand and lower rents? Or maybe you're a specialist in Section 8 housing. Whether Class A, B, or C housing, it's very hard to specialize in all property types. Sure, all SFR homes are unique, but it's key to identify the general characteristics of the homes you'd like to manage (or already excel in managing). Then, you and your team are dealing with more consistent situations. Compatibility Fit: You also need to make sure the investor as an investor fits with your approach. And we don't just mean personalities. Have a list of questions that help define what type of investor you can work with. In his podcast Owner Occupied, Peter Lohmann (co-founder & CEO of RL Property Management) talks to Marc Cunningham (President and Owner of Grace Property Management & Real Estate) about their lists, which include questions like: 1) Is the investor financially stable? 2) Is the investor emotionally stable? 3) Are they realistic in expectations? 4) Are they willing to trust us as the expert? Cunningham says his company can manage any property if the owner is right. Define what's important to you and stick to your guns. As Lohmann says in the podcast, "The easiest way to deal with a horrible owner client is to never onboard them in the first place." The goal is to filter out the people who are not a fit before you get into a contract with them. "When you're first starting out in this business, you chase everything," Cunningham says. "But as you grow and become successful, you need to slide that bar on your 'yes' and 'no' and start saying no." In short, nailing the definition of what type of investor and property you want to work with will help you find the right clients and ultimately succeed with them. You're not saying yes to every person who is looking for property management; you're looking for a specific type of customer. 3. Make sure your rental application requirements are clear Are you getting applicants who don't end up being a fit for your properties? It's possible the requirements are not clear on the listing or application. Is your advertising penetrating where it's going to reach qualified residents? Do potential applicants know what credit score they need, income requirements, and more? Of course, how you advertise and where varies widely by the market in your area. Some property managers say they would never use Craigslist, and others swear by it. Understand the market in your area and make it clear from your listings what is required to be accepted as a renter. You'll save everyone frustration with transparency and clarity. 4. Simplify rent collection and accounting processes You know the old saying, "Time is money.” It's particularly true in the rental property management game. Think about it: Every hour you spend chasing down a rent check or struggling with complex accounting software is an hour taken away from growing your business, networking, or improving other operational aspects. Simplifying your rent collection means introducing online payments, setting up auto-pay options, and even mobile payment methods. Modern residents love the ease of digital transactions. Making their lives easier often equates to faster, on-time payments and a heightened sense of trust. One way to simplify rent collection is to incentivize on-time rent payments. Second Nature’s Resident Benefits Package does just that by offering credit reporting and rental rewards to ensure that residents receive value for paying on time. As the property manager, it’s work off your plate! It's also a good idea to standardize your rent collection and use tools to support your team. New tech services like Colleen.ai and EliseAI can fully automate your rent collection communications. As for accounting, streamlined property management software solutions can auto-generate reports, offer real-time financial insights, and make tax season a breeze. By embracing these upgrades, you’re not just benefiting internally by saving time and resources – you’re showing current and potential residents that you value efficiency and are in tune with modern conveniences. The result? Higher resident satisfaction, a more enticing pitch to potential property investors, and an overall smoother business operation poised for growth. 5. Prevent vacancies with effective resident communication and engagement activities Remember when you first fell in love with your favorite coffee shop or that little bookstore around the corner? It wasn't just about the coffee or the books—it was the overall experience, the atmosphere, and the feeling of being recognized and valued. The same principle applies to a residential property management company. Resident communication isn't just about sending rent reminders or maintenance updates. It's about cultivating a relationship. Providing resident benefits, gifts, support services, and timely communication go a long way to showing residents you care about their home. Engagement programs like loyalty rewards or recognizing special occasions can also be game-changers. Looking for more inspiration on resident retention? Dive deeper into our resident retention ideas article to explore various strategies that will help keep your properties filled and your community thriving. 6. Automate single-family property management workflows Ever find yourself drowning in spreadsheets, buried under a to-do list a mile long, or juggling multiple software platforms? Surely we all have! The solution? Breathe easier with property management automation. The beauty of running a full-service property management firm in the 2020s is that there's likely a tool or system for nearly every task in property management, from rent collection to resident communication. Our best single family property management software article is a treasure trove of tools and platforms designed specifically for property managers. By implementing these solutions, you can automate repetitive tasks, reduce human errors, and free up time to focus on more value-driven aspects of your business. Think about it: a streamlined application and screening process, automated rent reminders, and digital maintenance requests—all working like clockwork without your constant intervention. Beyond the tools themselves, consider the integration possibilities. When your property management company software talks seamlessly with your accounting system or marketing platform, the result is a cohesive and efficient workflow. Need more insights into the power of automation? Dive into our in-depth automation-related articles to discover how you can revolutionize your day-to-day operations. 7. Invest in regular rental inspections Investing in regular rental property inspections isn't just about ensuring your property is in good shape—it's also a strategic move to bolster the relationship with your residents and maintain the value of your client’s investment. Here's the deal: Consistent inspections offer a proactive approach to property maintenance. They can catch small maintenance issues before they balloon into costly repairs. Got a minor leak? Catch it early, and you're saving both money and potential damage to a resident's belongings. But it's not all about damage control. Regular check-ins also send a clear message to your residents: you care about their well-being and the condition of the property they call home. It's an opportunity to foster open communication, showing residents that their feedback is valued. Moreover, well-maintained properties tend to attract and retain quality residents. Those who know their property manager is on top of things will likely stay longer and treat the property with respect. Plus, when it's time to find a new resident, you've got a spotless track record of upkeep to show off. In short, consider inspections as a small investment now that can yield big returns in resident satisfaction, property value, and overall peace of mind. 8. Create a referral program to increase your portfolio Word of mouth? It's powerful. And in the property management game, it's gold. Imagine this: your current clients, satisfied with your stellar services, singing your praises to friends, family, and colleagues. Now, what if you could incentivize that process? Enter the referral program. Happy real estate investors are your best brand ambassadors. They've experienced firsthand the quality of your management, and their endorsement carries weight. So, why not reward them for bringing in new business? A referral program can do just that. Start by offering incentives. For your investor clients, perhaps it's a discounted management fee for a month. The point is to offer something tangible that'll get folks talking and referring. But there's more to it than just the direct business benefits. A referral program demonstrates that you value the relationships you've built. It tells your clients that their trust and loyalty don't go unnoticed. Lastly, an added bonus: with every successful referral, you not only grow your portfolio but also create a network of investors who are invested in your success. It's a win-win, driving growth for your business while strengthening the bond with your current clientele. 9. Find new investment properties and pitch them to your current clients You're already managing a portfolio of properties for your investors, ensuring they get solid returns and have few hassles. But here's the question: What if you could amplify those returns for them and simultaneously grow your business? Actively seeking out new investment properties is more than just scouting real estate; it's an art of opportunity. By identifying lucrative properties that align with your investors' strategies, you're essentially providing them with golden opportunities on a platter. And guess who they'll want managing these new assets? That's right, you. When you present these potential investments to your current clients, it accomplishes a few things. Firstly, it reinforces your role as a trusted partner in their financial journey, showing them that you're proactive and always on the lookout for ways to amplify their wealth and boost their cash flow. It's not just about maintaining what they have; it's about growing it. Secondly, every new property they acquire based on your pitch naturally expands your management portfolio. This approach helps scale your business, fostering client trust and loyalty along the way. Remember, in the property management world, being static isn't an option. By constantly seeking growth opportunities for your clients, you're also carving out a pathway for your own business's expansion. 10. Invest in marketing activities for short vacancy cycles Imagine a prime property in a stellar location, decked out with all the bells and whistles...sitting vacant. The eerie silence echoing in those empty halls isn't just the sound of missed opportunities – it's also the sound of revenue trickling away. Maybe that was a little dramatic. But the real estate game is as much about visibility and appeal as it is about bricks and mortar. The quicker you can get a property off the market and into the hands of a reliable resident, the better for everyone involved. This is where strategic marketing steps in. Investing in a robust property management marketing strategy does more than just showcase a property; it strategically positions it in front of the right eyes. With targeted campaigns, engaging visuals, and compelling copy, you can ensure your property doesn’t get lost in the sea of listings. Use social media, virtual tours, and local advertising to create a buzz. Moreover, effective marketing helps paint a lifestyle. When potential residents can visualize themselves in a space, they're more likely to take the leap. By consistently shortening vacancy cycles through effective marketing, you not only ensure a steady revenue stream but also enhance your reputation as a go-to property manager who gets results. In essence, marketing isn't an expense; it's a pivotal investment. It's the bridge that connects empty properties with eager residents, ensuring your business always stays on the move. Increase revenue from your SFR property management business with Second Nature Optimizing your single-family property management business is not a one-size-fits-all solution. From engaging with the right investors to fine-tuning marketing endeavors, the path to success is paved with multifaceted, dynamic approaches. But the key to it all is creating a better experience: for residents, investors, and your property management team. That’s why, at Second Nature, we’ve built a Resident Benefits Package that supports SFR property management businesses. Each benefit is designed to meet resident needs and investor priorities while taking work off your team’s plate. In the dynamic world of SFR property management, adaptability and efficiency are kings. With Second Nature by your side, you’re not just keeping pace with the industry; you’re setting the benchmark. So, as you work towards crafting a business that stands tall and resonates in the market, remember: Your success is our second nature.

October 31, 2023

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Announcement: On-Demand Pest Control Added to RBP

Your resident benefits package from Second Nature just got stronger. We’re excited to announce the addition of On-Demand Pest Control, a convenient service for residents courtesy of our brand-new partnership with Pest Share. What is On-Demand Pest Control? On-Demand Pest Control is a service made available to residents through their RBP that allows them to request pest control services when needed, allowing for quick response and convenient timing instead of routine sprays. Treatment and coordination costs are included for all covered claims, so you can rest assured that you're getting the best possible service. How Does On-Demand Pest Control Work? The process is simple and easy, and is managed for you by Second Nature. Residents submit a request for pest control services through pest.residentforms.com and Pest Share assigns a service provider that will communicate directly with the resident in order to schedule service time. How Much Does On-Demand Pest Control Cost? As mentioned, the cost for these services are built directly into the RBP, so there is no bill for you or the resident. It’s simple, easy, and on-demand for the resident, and it’s a useful service you can provide them without adding admin hours. It also helps protect the assets of the investor, as residents are more likely to request pest control services when they aren’t concerned about footing a bill. It’s a triple win. Residents don't have to worry about the lease saying who is responsible for pest control, it's already built-in for them. It's an easy button. - Brian Phelt, Forefront Property Management What Pests Are Covered? Pests that are often a resident's responsibility that PMs offer on-demand coverage for include bed bugs, fleas, ticks, mites, and cockroaches. Coverage can extend to other pests as well, and Pest Share offers different packaged coverages with certain packages that allow for customization to account for regional differences in common infestation problems. What about pests that aren’t covered? Pests that are not covered under the on-demand pest control service within the RBP can still be requested by the resident through the same process. The only difference is that the resident will be responsible for payment to the service provider themselves. Ready to add on-demand pest control to your resident benefits package? Get a demo today!

October 11, 2023

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How to Calculate Tenant Turnover and Tips to Reduce It

Tenant turnover is the process that occurs when a current tenant vacates a rental property, and a new tenant moves in. It’s just the natural process of residents moving in and moving out. Sometimes, it’s a sign of a challenging property, but often, it’s just a natural part of the renting journey. While tenant turnover is a standard part of the rental business, the downside is that it often comes with associated costs and potential revenue loss due to vacancy periods. Tenant turnover costs can exceed thousands of dollars per month and hurt your cash flow. Understanding the ins and outs of tenant turnover meaning is essential for effective property management and profitability. It’s key to reduce the time of a turnover and to know the average tenant turnover rate in your area. Second Nature's Outlook: "Tenant turnover” is an industry term used from time to time. But we here at Second Nature are trying to evolve the word "tenant." We’ve seen the incredible work property managers do day in and day out to make renters feel like they’re so much more than just a tenant – they’re residents. Making renters feel like residents isn’t just philosophical, it also encourages them to invest in care for their home and add value to the property. This is why, at Second Nature, we prefer to call renters “residents.” Like you, we think of them as people first – making your property their home. How to Calculate Tenant Turnover Rate Getting the tenant turnover rate calculation correct is essential for property managers and landlords to understand their property's performance and the effectiveness of their management strategies. The good news? The math isn’t complicated! Go through these three simple steps in our tenant turnover formula to get your rate: Determine the number of move-outs in a year: First, identify the total number of tenants who moved out of your property during a specific period, usually a year. Identify your average number of total units: Calculate the average number of rental units you have available for that same period. For example, if you started the year with 10 units and ended with 12, your average would be 11 units for the year. Calculate the turnover rate: Divide the number of move-outs by the number of total units and multiply by 100 (to get a percentage). Tenant Turnover Rate = (Number of Move-outs) / (Number of Units) X 100 For instance, if you had three move-outs in a year and an average of 11 units, your tenant turnover rate would be: (3/11) X 100 = 27.27%. This means that 27.27% of your units experienced tenant turnover that year. Understanding this rate can help you set targets and measure the success of your retention initiatives. Related: How to Write a Tenant Move-Out Letter Understanding Tenant Turnover Costs Vacancies create disruption to your income stream and your investors' cash flow. The longer the vacancy, the more you're spending on marketing and management to find a new tenant. Here are four ways tenant turnover costs property managers. 1. Maintenance & Repair After a tenant leaves a property, you have to restore it to a marketable condition. Ideally the tenant leaves it in excellent condition. But you'll still likely need to pay for deep cleanings, some light repairs, and some updates like fresh paint, patching holes, etc. Additionally, as a property sits vacant, it will slowly deteriorate to some degree. The longer the vacancy, the more need for maintenance, upkeep, or repair. 2. Showings Whether you do in-person showings or virtual/remote showings, there is a cost to prepping and opening the property to prospective tenants. You may need team members on site, or to make time to set up virtual showings. 3. Marketing A vacant property is a property that needs to be filled. You may primarily use services like Craigslist or Zillow, which require time and cost within your own team to build and maintain listings. Or, you may also pay for ads to get more viewings. And, of course, in some cases you'll need to include real estate agent commissions in your budget. 4. Overhead The whole process of turning a property involves hands-on effort from yourself and your team (if you have one). The cost in time and team member's salaries can add up. How to Reduce Tenant Turnover We don’t have to tell you that high tenant turnover is a property manager's nightmare. It incurs significant costs, from marketing the property and screening new tenants to potential lost income during vacancies. Tenant turnover costs can add up to thousands for each unit each month. However, with the right strategies in place, reducing tenant turnover is more than achievable. Let’s explore these tenant retention strategies that not only enhance the resident’s living experience but also boost the value of your client-investor’s assets and your business’s reputation. 1. Offer Competitive Rent Prices Ensure your rent prices are in line with the local market. Overcharging can lead to tenants seeking more affordable options elsewhere. Fortunately, with the interconnectedness of the real estate market, and a proliferation of software and apps that help track it, property managers can easily stay on top of the latest market trends. 2. Foster a Strong Property Manager-Tenant Relationship Regular communication and a respectful attitude can go a long way. Make tenants feel valued and heard. Address their concerns promptly and maintain transparency in all interactions. Clear and consistent communication goes a long way to protect this relationship. A Resident Benefits Package is an excellent way to prioritize the PM-resident relationship. It shows them you really care about their lived experience and offers solutions to their most common pain points. 3. Address Maintenance Requests Promptly Swiftly responding to and resolving maintenance issues demonstrates that you care about the tenant's comfort and safety. Regular maintenance checks ensure small issues don't become major problems. When tenants see that the property is well cared for, they’re more likely to stay – and to take care of it themselves. Another important factor is offering on-demand pest control, not just preventive care. Residents will rest easy knowing that, should any issues arise, they know exactly who to turn to and that it will be dealt with promptly. 4. Update and Renovate Modernizing appliances or adding new amenities can make the property more attractive and encourage tenants to stay longer. Modern, functional amenities can be a significant draw. Periodically update or add amenities like a dishwasher, laundry units, or improved outdoor spaces to enhance the property's appeal. 5. Offer Lease Renewal Incentives Consider providing discounts or other benefits for those who renew their lease, making the option more enticing. A resident rewards program can accomplish this along with incentivizing on-time rent payments and extra TLC for the property. 6. Ensure Security One of the top priorities for any resident is feeling safe in their home. This extends beyond just locking doors; it involves well-lit outdoor areas, potentially installing security cameras, etc. But did you know that identity theft has actually surpassed home burglaries as a risk to renters in the past two years? That’s why our Resident Benefits Package includes identity protection and renter’s insurance. Insurance protects your property, and identity protection preserves the resident’s financial stability – and, therefore, their ability to continue making rent. By proactively ensuring that security measures and insurance are up-to-date and effective, property managers can instill trust and peace of mind in their tenants, encouraging them to stay longer. And by providing identity protection, you can ensure that payments are safe, too. 7. Conduct Regular Inspections Routine inspections aren't just about ensuring that tenants are treating the property well; they're also an opportunity to identify and address minor issues before they escalate. By regularly checking in and maintaining open communication, property managers demonstrate commitment to the property's upkeep and the tenant's well-being. These inspections also give residents the confidence that they're in a proactive environment. They know you’re looking out for them and likely won’t feel the need to look for alternatives that might be less proactive. 8. Implement a Rewards System Resident rewards are an integral part of an RBP for good reason. Recognizing and rewarding responsible behavior can play a significant role in fostering loyalty among residents. By introducing a rewards system, property managers can incentivize timely rent payments, property care, and long-term leases. Whether it's a discount on a month's rent, a gift card to a local establishment, or points that can be redeemed for various perks, rewards make tenants feel appreciated. Over time, this builds a positive relationship, encouraging them to renew their leases and view their rental as more than just a temporary dwelling. 9. Vet Tenants Thoroughly One of the best proactive steps in ensuring long-term tenancy is by meticulously vetting potential tenants. The process of screening new tenants, with background checks, evaluates a tenant's rental history, financial stability, and overall fit for the property. By identifying individuals with a history of timely payments, respect for previous rental properties, and stable employment, property managers increase the likelihood of having residents who will care for the property, abide by lease terms, and remain for extended periods. This approach not only minimizes potential conflicts and evictions but also fosters trustworthy and transparent relationships with your residents. 10. Seek Feedback and Act on It Actively seeking feedback from tenants provides invaluable insights into areas of improvement and showcases a genuine commitment to enhancing their living experience. Whether it's through regular surveys, suggestion boxes, or casual conversations, understanding tenant concerns and promptly addressing them helps build trust and rapport. When residents see that their opinions matter and lead to tangible changes, they feel valued and heard. This proactive communication strengthens your relationship and often encourages longer stays as residents recognize the effort made to optimize their living environment. Tenant Turnover Checklist for Property Managers Here’s a checklist template for managing tenant turnover at your properties. 1. Pre-notice Period Review lease expiry dates. Initiate renewal conversations with tenants. Survey tenants on reasons for move-out if they choose not to renew. 2. Once Notice is Given Provide move-out instructions to tenants. Schedule a pre-move-out inspection. Inform maintenance team of upcoming vacancy. 3. Inspection and Repairs Conduct thorough move-out inspection. Document and photograph any damages beyond normal wear and tear. Get estimates and schedule repairs and upgrades. Clean or replace carpets if necessary. Paint walls where required. 4. Marketing the Property Update online listings with current photos and features. Set competitive rent based on market research. Host open houses or private viewings. 5. Tenant Application and Screening Collect applications from prospective tenants. Conduct thorough background and credit checks. Check references from previous landlords. 6. New Tenant Onboarding Prepare and sign a new lease agreement. Offer a welcome packet, gift, and orientation for new tenants. Hand over keys and ensure they understand property rules. 7. Post-move-in Seek feedback on the move-in process. Provide information on reward programs or other incentives. Remind new tenants of maintenance request procedures. 8. Financial Matters Finalize any previous tenant's security deposit returns, accounting for any deductions. Set up new rent collection methods with the incoming tenant. 9. Continuous Improvement Analyze reasons for turnovers. Update property features based on tenant feedback. Consider conducting a yearly review to address potential concerns before they lead to turnover. Print or save this checklist to ensure a smooth tenant turnover process and mitigate potential challenges. By following these steps, property managers can streamline the transition period and maintain a high standard of service for all residents. Related: Step by-Step Tenant Onboarding Process

October 10, 2023

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What is Tenant Retention and 15 Ways to Improve it

What is tenant retention? Tenant retention refers to the ability of property owners or managers to keep their current tenants renewing their leases rather than having them move out and needing to find new renters. In the world of property management, retaining tenants is often more cost-effective and efficient than constantly finding new ones. This practice not only ensures a steady cash flow of rental income but also reduces expenses associated with vacancies, marketing, and new tenant screenings. To maximize tenant retention, you need a combination of value-driven services, proactive management, and strong tenant relationships. In this guide, we'll delve into 15 top tenant retention strategies. Second Nature's Outlook: "Tenant turnover” is an industry term used from time to time. But we here at Second Nature are trying to evolve the word "tenant." We’ve seen the incredible work property managers do day in and day out to make renters feel like they’re so much more than just a tenant – they’re residents. Making renters feel like residents isn’t just philosophical, it also encourages them to invest in care for their home and add value to the property. This is why, at Second Nature, we prefer to call renters “residents.” Like you, we think of them as people first – making your property their home. 1. Offer a Resident Benefits Package It’s one of the biggest trends in property management for a reason! Offering a Resident Benefits Package (RBP) is a strategic move to elevate the overall resident experience. And nothing is more critical to tenant retention than their experience. An RBP typically bundles various services and amenities that cater to the modern tenant's needs and desires. This can range from convenience-driven offers like an air filter delivery service or move-in concierge to value-driven aspects like resident credit building and renters insurance programs. By incorporating such a package, property managers not only enhance the perceived value of living in their property but also position themselves as being attuned to the evolving demands of today's renters. That’s what makes an RBP such a significant differentiator in the competitive renter’s market, making tenants more likely to renew their leases and stay longer. 2. Address Maintenance Requests Promptly When it comes to rental experience, property maintenance is a top priority – and, unfortunately, often a top pain point. One of the chief concerns for tenants is how swiftly and efficiently their maintenance requests are addressed. Quick and effective responses to these requests demonstrate a property manager's commitment to the well-being and satisfaction of their tenants. Delays or negligence can lead to a feeling of being undervalued or overlooked, pushing renters to look for alternative accommodations where their concerns might be treated with greater urgency. Moreover, swift repairs prevent minor issues from escalating into major, costlier problems. In essence, by prioritizing and promptly attending to maintenance requests, property managers not only ensure the structural integrity and safety of their property but also build trust and rapport with their tenants, encouraging longer stays. 3. Incorporate a Renter’s Insurance Program Offering or even mandating a renter's insurance program is a proactive measure that benefits both property managers and tenants. This insurance covers tenants' personal belongings in cases of theft, fire, or other unexpected events, granting them peace of mind. For property managers and owners, it offers an extra layer of protection, as tenants are less likely to pursue claims against the property for personal loss. Additionally, when damages or accidents occur that aren't the property owner's responsibility, having an insurance policy ensures that costs are covered without disputes. For owners, it protects their property and protects them from financial losses. They can also often get lower premiums on their own insurance if they can prove their renters are covered with their own policies. Second Nature addresses this benefit by offering a renter’s insurance program as part of our RBP. 4. Focus on Security In today's evolving risk landscape – with digital threats, increasing weather risks, etc. – ensuring tenant safety should be a paramount concern for property managers. In turn, tenants are more likely to stay in a property where they feel safe and secure. By installing high-quality security systems, surveillance cameras, weather safety plans, or generators, and by regularly updating and maintaining these systems, property managers can provide an environment where residents feel their well-being is prioritized. It's not just about the physical infrastructure either. Identity theft has surpassed home burglary in the level of threat to renters. At Second Nature, we provide $1 million identity protection as part of our RBP. That ensures that residents feel safe – and that their financial stability is protected. That, of course, protects their ability to pay rent. A steadfast commitment to safety fosters trust and is a clear indication to tenants that their welfare is taken seriously, thus making them more inclined to renew their leases. 5. Offer Incentives We all like a nice incentive now and then! Incentives play a pivotal role in tenant retention, acting as a value proposition that goes beyond just the living space itself. For example: By incorporating a credit reporting program, property managers can incentivize on-time rent payments, helping tenants build a positive credit history in the process. This not only promotes financial responsibility but also offers a tangible benefit to the tenant. Lease renewal incentives, such as discounted rent for the first month of renewal or free amenity usage, further encourage tenants to stay longer. Incentives create win-win solutions where tenants feel they're receiving added value while the property manager and owners benefit through consistent occupancy. 6. Implement a Rewards System Building a robust tenant relationship goes beyond addressing their needs; it also involves rewarding their loyalty. Programs in other industries maximize this type of value – think of Starbucks Rewards or Delta SkyMiles. A Resident Rewards program is similarly a strategic approach to foster customer satisfaction and long-term loyalty. Unlike direct incentives, these rewards programs offer points or credits for consistent on-time payments, renewing leases, or even care for the property. Over time, these points can be redeemed for tangible benefits or perks like gift cards, discounts on amenities, or special privileges within the property. By providing a continuous system of recognition, property managers can cultivate a positive tenant culture, making residents feel appreciated and thereby more inclined to renew their leases. Such a system also nudges tenants to adopt behaviors beneficial to both them and the property management, leading to a harmonious rental ecosystem. 7. Conduct Regular Inspections Regular inspections are a cornerstone of proactive property management and are essential for maintaining tenant satisfaction. By periodically assessing the condition of a rental property, managers can identify and rectify potential issues before they escalate. Whether it's a minor leak or wear and tear, addressing them early on reduces long-term maintenance costs and demonstrates a commitment to providing tenants with a well-maintained living space. Furthermore, these inspections offer an opportunity for open communication with tenants, understanding their concerns, and building trust. While it's crucial to respect a tenant's privacy by giving proper notice and scheduling at convenient times, these inspections emphasize the property manager's dedication to preserving the property's value and ensuring resident comfort. 8. Update and Renovate In the competitive world of rental real estate, properties that remain stagnant quickly lose appeal. By making periodic updates and renovations, property managers can significantly enhance the rental's desirability and rental rates and keep it aligned with current housing trends. Whether it's a modern kitchen makeover, a bathroom upgrade, or simply a fresh coat of paint, these changes can breathe new life into a space. Not only do renovations increase property value, but they also communicate to tenants that their living experience is valued and considered. Tenants are more likely to renew their leases when they see active efforts being made to improve their living environment, ensuring they always feel they're getting the best value for their money. 9. Offer On-Demand Pest Control One of the fastest ways to sour a tenant's experience? Leaving them to deal with unwanted pests. It also might put you or the owner at risk of legal action, depending on the state. Whether it's ants in the summer or mice in the winter, pest issues can quickly escalate if not addressed immediately. By offering property management pest control as part of the tenant package, property managers demonstrate a proactive approach to potential issues and ensure that tenants feel their well-being is a top priority. This service minimizes the likelihood of recurring pest problems and showcases a commitment to maintaining a clean and habitable environment. It’s also a better ROI than preventive sprays that don’t necessarily address real issues. On-demand services ensure that actual issues are addressed as soon as they pop up (or crawl out!). Tenants will appreciate the quick response and effort to ensure their comfort, further solidifying their decision to stay long-term. 10. Include Valuable Services like Filter Delivery Property managers know that it’s often the small touches that leave a lasting impression – and nip bigger problems in the bud. One such valuable service is offering filter delivery. Regularly changing air filters not only ensures a healthier living environment by improving air quality but also boosts the efficiency of heating and cooling systems, saving significantly on energy bills. In fact, a study by the National Rental Home Council (NRHC) found that filter delivery could reduce costs by up to nearly 80%. By offering filter delivery, property managers remove a common chore from the tenant's list, demonstrating attention to detail and a commitment to their comfort. This proactive approach to maintenance, coupled with the convenience of direct-to-door delivery, can enhance the overall resident experience, making them more inclined to extend their lease. 11. Offer a Move-in Concierge The moving process can be one of the most stressful experiences for new tenants, filled with a myriad of tasks and uncertainties. In fact, most renters have already made their decision to renew or not within the first 30-60 days. By offering a Move-In Concierge service, property managers can significantly ease this transition. This service assists new residents with tasks like utility setups, mail forwarding, local service recommendations, and even scheduling movers or rental equipment. Beyond just the practical help, a Move-In Concierge communicates to the tenant that their comfort and smooth transition are a priority. This initial positive experience can set the tone for the entire duration of the lease, making tenants feel valued and well cared for from the outset. Related: How to Write a Tenant Welcome Letter + Free Template 12. Use Digital Solutions It’s just the reality of 2023 and beyond: Tenants expect digital convenience. Whether it's online rent payments, a tenant portal for logging maintenance requests, or virtual property tours, embracing digital solutions can greatly enhance the tenant experience. These platforms not only streamline administrative tasks, reducing the possibility of human error but also provide a more responsive and efficient service to residents. For younger generations especially, the ability to manage their tenancy online can be a significant deciding factor in choosing a rental property. Property managers who keep pace with technological advancements in the industry not only improve tenant retention but also position their properties as modern and forward-thinking. 13. Vet Tenants Thoroughly The process of tenant retention begins even before a lease is signed. By thoroughly vetting potential tenants, property managers can ensure they're selecting responsible individuals who are more likely to be great tenants – tenants who will respect the property, adhere to lease terms, and foster a positive community environment. This involves conducting comprehensive background checks, verifying employment and income, and checking references from previous landlords. By choosing good tenants who have a track record of timely payments and good behavior, you set the stage for a longer, more harmonious rental relationship. It's an investment in time upfront that can save countless hours and resources in the long run. 14. Seek Feedback and Act on it Among the best tenant retention tips: Tenant feedback is an invaluable tool for understanding what you're doing right and where there might be room for improvement. Actively seeking out tenant opinions through surveys, feedback forms, or simply open-door policies can shed light on aspects of property management that might otherwise go unnoticed. Of course, collecting feedback isn't enough on its own; the crucial step is to genuinely act upon the insights gathered. Whether it's a minor repair, upgrades, or better communication methods, implementing changes based on tenant feedback not only improves the living experience but also shows residents that their voices matter, fostering trust and encouraging longer tenancies. 15. Foster a Strong Property Manager-Tenant Relationship The foundation of tenant retention often rests on the relationship built between the property manager and the tenant. This bond goes beyond mere transactions and lease renewals. It's about understanding, respect, and open communication. By being approachable, responsive, and genuinely caring about tenants' well-being and comfort, property managers can foster a sense of community and belonging. Regular check-ins, prompt responses to concerns, birthday or anniversary gifts, and occasional gestures of appreciation can make tenants feel valued. A strong relationship not only reduces the chances of tenants seeking a new place but also encourages positive word-of-mouth recommendations, benefiting the property's reputation and bottom line. Tips for Successful Tenant Retention Program At the heart of tenant retention is a simple yet profound realization: tenants, much like any consumers, are looking for value, ease, and assurance in their choices. When it comes to exploring the topic of tenant retention meaning, for us, it’s all about the resident experience. The key question for tenant retention is simply: “How do we create an experience so good that residents never want to leave?” Answering this question helps property managers identify exactly what residents are willing to pay for and stay for. Here are a few tips for approaching the resident experience. Get a much more in-depth look at it through our 2023 State of Resident Experience Report. Focus on convenience: Today's residents value convenience more than ever. Be it quick maintenance solutions, easy-to-access amenities, or streamlined communication, the easier you make life for your tenants, the more likely they are to stay. A resident benefits package or on-demand services are ways to weave in this convenience. Embrace digital transformation: The digital age has transformed tenant expectations. Online rent payments, digital lease signings, AI-powered helpdesks, and smart home integrations are just a few avenues where digitalization can significantly enhance the resident experience. Aim for the Triple Win: True success in tenant retention is realized when all parties involved – the residents, property managers, and owners – feel they're gaining value. Implement strategies where each party stands to benefit, ensuring harmonious, long-lasting relationships. By grounding your tenant retention program in these principles, you not only meet resident expectations but often surpass them. How Second Nature Helps with Tenant Retention Navigating the world of tenant retention can be intricate, but Second Nature simplifies the journey. Our comprehensive Resident Benefits Package (RBP) is meticulously designed to cater to modern tenant needs, offering unparalleled convenience and value. By focusing on strategies that drive resident satisfaction, Second Nature ensures both property managers and owners achieve higher tenant retention rates. Embrace the RBP, and witness the transformative impact it brings to your property management endeavors.

October 10, 2023

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How Resident Benefits Packages Benefit Owners and Investors

In today's competitive property market, ensuring a standout resident experience isn't just a nicety—it's a necessity. Enter the Resident Benefits Package, an innovative tool embraced by savvy property management companies to elevate the living experience for residents. But the advantages aren't limited to just happy residents. For property owners and investors, these packages can translate into tangible, profitable outcomes. From reducing overall costs to bolstering a property's reputation and value on the market, the strategic deployment of a Resident Benefits Package can directly contribute to a stronger return on investment for owners. In this article, we'll delve into the top ways that a Resident Benefits Program not only benefits residents but also significantly boosts the bottom line for property owners. Why Focusing on Resident Experience is the Key to Success At Second Nature, we’ve seen that when residents win, investors also win. Here’s why: Resident retention is key to winning in real estate investing. And the cost of resident turnover is increasing. In rental management, expenses are up, and the cost of turning a property has almost doubled in four years. Hard materials and labor costs have gone up precipitously. With rent also increasing, it means greater lost revenue while a home sits vacant. At the same time, the market from the owner’s side is getting more competitive. The pandemic days of properties getting snapped up within hours are no longer. The demand has cooled, and it's taking longer to fill properties, and it’s more expensive with each turnover. What does all this mean? Resident retention is increasingly important. Studies continue to show that resident retention and lease renewal is influenced by renter satisfaction. But creating an excellent resident experience is HARD. There are hundreds of experience-critical moments happening over the course of a long-term customer journey, and each of them poses its own unique challenges and opportunities. That’s where the Resident Benefits Package comes in. An RBP is a collection of innovative solutions to some of the most persistent problems in resident experience. A Resident Benefits Package is an answer to the question: How do we make an experience so good that residents never want to leave? By packaging solutions that improve resident satisfaction, the RBP also drives results for investors. The Second Nature RBP includes the following services: Filter Delivery Service Identity Protection Resident Credit Building Renters Insurance Resident Rewards Move-in Concierge On-Demand Pest Control Let’s dive into how each of these services leads to better outcomes for property owners. The Value of a Resident Benefits Package for Property Owners While the Resident Benefits Package is a resident-facing product, the benefits extend beyond residents to generate value for property managers and property owners, too. It’s a Triple Win. Here are six of the top benefits to owners of implementing an RBP. 1. Drives Resident Retention A Resident Benefits Package (RBP) isn’t just a set of perks—it's a holistic approach to improving the living experience of residents, ensuring they stay longer in your property. By focusing on resident experience, property managers can earn better returns on investment for their investor clients – because of resident retention. Here's how each feature of your RBP impacts retention: Air Filter Delivery Service: The National Rental Home Council (NRHC) found that a filter delivery subscription reduced HVAC-related work orders by 38%. Reducing 38% of no-air calls in hot summers and cold winters means reducing 38% of negative experiences that could make residents want to move. Also, average savings of $177 per year on energy bills alone more than pays for the program cost. Clean air being as easy as opening the front door helps residents breathe easy and stay healthy. Happier, healthier residents make for healthy investments, too. Resident Identity Protection: Identity theft actually passed home burglary in 2021 and continues to rise. In an age where identity theft is a pressing concern, offering residents an identity protection service is a critical way to keep them safe. Advanced AI technology actually monitors the dark web and helps prevent issues before they occur. A $1M policy and a team of restoration specialists are there to keep good residents protected from a bad situation turning into delinquency or even eviction. In short, it protects residents’ ability to pay rent and support a long-term lease. Resident Credit Building: This service actively helps residents improve their financial health. Our credit building program is shown to save residents hundreds to thousands per year on car payments and credit cards. Plus, renewing residents can get back reporting up to 24 months at no extra cost, which puts even more incentive on renewing. Renters Insurance Program: OK, so there’s insurance, then there’s triple win-surance. Our purpose-built master policy covers property damage and legal liability but also coverage for residents' personal belongings. There are even unique coverages not often found in retail policies, like rental income loss in the event a covered peril leads to rent concession. And residents get the benefit of bulk pricing, saving a few dollars off the average premium. If residents want to get their own policy, our program monitors any 3rd party policies so there are no lapses in coverage. Closing that compliance gap means eliminating risk and exposure for you and your property. Resident Rewards Program: Second Nature’s rewards program incentivizes positive behavior like timely rent payments. Just by paying rent on time, residents avoid late fees and earn $150+ in gift cards and rewards points. Instead of feeling like rent is a drain, now they are building and earning. Move-In Concierge: Property managers know an important insight: Within the first 60 days of renting, barring a life event, many residents have already decided whether they will renew or not. That’s why move-in and the first few weeks are so critical to retention. By offering a move-in concierge service, you're easing this transition. This service can assist with utilities, internet, TV, and more, making the move smoother and setting a positive tone right from the start. On-Demand Pest Control: A comfortable living space is one free of pests. But preventive sprays are really a luxury, not an ROI. On-Demand Pest Control eliminates disruptive, big expenses – and brings fast, quality service to stop infestations at one-third the cost of preventive sprays. This high-value approach ensures responsibilities are transparent and accounted for so owners don’t get stuck with bills that shouldn’t be their responsibility. In essence, every feature of the RBP is carefully chosen to add value to the resident's experience. When residents perceive value, feel protected, and benefit financially, they're much more likely to renew their lease, underscoring the importance of a comprehensive RBP in property management. 2. Reduces Costs Yep, you heard us correctly! Integrating a resident benefits program is an effective way to reduce investor costs over the long run. For residents, the benefits of the RBP save them money over their alternatives. Here's how it works in terms of cost reduction: Lower turnover costs: With added benefits that cater to residents, turnovers become less frequent. The cost of finding new tenants – think advertising, showings, and screening – can quickly add up, not to mention potential lost revenue from vacant units. An RBP can keep existing residents happy and more likely to renew, thereby minimizing these costs. Maintenance savings: One of the most cost-saving pillars of the Second Nature RBP? Our Filter Delivery Service. The average cost of HVAC repairs has increased by nearly 50% year over year. Preventing emergency maintenance issues has never been more important. An HVAC filter delivery subscription can cut costs up to $300 per property per year and reduce HVAC maintenance requests by nearly 40%. Emergency expense savings: Services like on-demand pest control ensure residents get transparency and cover their lease responsibility, so owners don’t get stuck with a bill they aren’t supposed to. Reduced premiums: With a renters insurance program that ensures 100% compliance, many investors are able to get a discounted rate because there’s less risk of expenses falling on their policy. 3. Increases On-Time Payments On-time and early rent payments are critical to the overall success of your financial investment in property. A Resident Benefits Package is a tool to increase the resident behavior you want to see – starting with consistent, timely payments. For example, by implementing a rewards program for early or on-time rent payments, property managers tap into a powerful motivational tool. While late fees provide an important incentive, a carrot approach helps drive the best outcome for everyone. Everyone appreciates acknowledgment for their timely actions, and residents are no exception. The prospect of earning rewards serves as a tangible incentive for current residents to ensure each month’s rent is paid promptly. Rent day becomes rewards day. Of course, on-time rent payments don't just benefit property investors, they can also bolster the credit profiles of residents. With a credit building program built into an RBP, each punctual payment is reported to credit bureaus, allowing residents to progressively build or enhance their credit scores. Knowing that their timely payments contribute to their financial well-being provides residents with another compelling reason to always pay on schedule. The savings residents get on rewards, auto loans, credit card interest, etc., makes it easier for them to be able to afford rental payments – and increases – over time. Credit reporting protects both the residents and property owners. 4. Protects Your Assets Let’s jump into a story for a minute. A landlord we know onboarded a new resident last year and asked that resident to show proof of insurance before they moved in. All good to go, they signed the lease and moved in. The problem? The policy later lapsed. After that date, there was a house fire. Fortunately, no one was injured, but the home was a total loss. A triple-lose situation of the biggest proportions – for the resident, the property manager, and the property owner. Maybe you know people who have been through similar situations. Or maybe you have yourself. That’s why the Second Nature Benefits Package includes a renters insurance program that ensures 100% compliance. We specifically designed it to generate triple-win protection. The program includes a master policy that residents can opt into or requires them to carry their own insurance policy. 96.3% of Second Nature residents are enrolled in a master policy or the custom HO4 we offer in our program. 3.7% of residents bring their own approved policy. In addition, our renter’s insurance includes protections for the property owner, like Rental Income Loss protection. Another benefit is that you can generally get a discount on your own property insurance if this kind of program is in place. Wins all around. 5. Improves Financial Value Real estate is obviously an asset. But consider this, too: The asset to a rental property owner is your revenue from the property. Sure, real estate itself can appreciate, but you can also look at it a different way – your residents’ income and ability to pay rent is also an asset you want to protect. That’s where identity protection comes in. In 2021, cybersecurity threats passed home burglary in the level of risk it poses to Americans. In 2021, one in eight Americans were victims of identity fraud, equaling up to $52 billion in losses. Identity theft has a massive impact on people’s financial security and their ability to pay rent. Our $1 million identity protection, with proactive dark web monitoring, is there to protect your residents and keep you from having to penalize or even evict a resident who is affected at no fault of their own. Another bonus: Residents at your properties have peace of mind. 6. Increases ROI A Resident Benefits Package focuses on the most streamlined ways to get residents products and services that make leasing rewarding, effortless, and predictable. Bundling services together in a benefits package results in substantial cost and time savings compared to procuring each service individually. A bundled approach minimizes administrative burdens and streamlines processes, further reducing operational costs. The savings generated from this efficient approach can be passed on to the residents, thus boosting the property's value and, consequently, the investor's ROI. An example of this is on-demand pest control. Pest control is often buried in lease agreements and is unclear. Some agreements cover preventive sprays (which are expensive!), but less than 20% of issues are dealt with through those services. It’s a luxury cost that some people will want to pay for, but it’s certainly not an ROI proposition. An RBP with on-demand pest control, on the other hand, protects the investor for 50-70% lower cost. Residents get the kind of pest control they really need – on-demand – so when they have an actual issue, they can immediately file a claim. This prevents issues from escalating into bigger issues and infestations – situations where the cost too often falls on the investor. Costs are lower, residents are happier, and your properties and financials are safer. These services also manage compliance for you. Different states have different laws regarding who is responsible for pests, the resident or the investor. Pest control services through an RBP will ensure you are always in compliance. Why RBPs are Essential to Triple Win Rental Experiences A Resident Benefits Package isn't just a compilation of services – it's a holistic approach to property management services that replaces negative resident experiences with positive ones. For property investors, the advantages are clear: cost savings, increased retention, timely payments, protected assets, and an elevated return on investment. Beyond the numbers, it’s about cultivating a relationship where residents feel valued, supported, and eager to stay. As the landscape of property management evolves, those who prioritize resident experience are looking at long-term returns on those investments. A peek into the future: An innovative and parallel service that property managers can provide is an Investor Benefits Package (IBP)™️. The IBP should provide an investor experience platform™️ that unlocks scalable product and service customization, digitized onboarding, accounting policy automation, and more. Learn more at the link.

October 10, 2023

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20 Top Experts Weigh In On Optimizing the Resident Experience

In today's ever-evolving property management landscape, the focus on resident experience has taken center stage. It's not just about the bricks and mortar anymore; it's about building meaningful experiences, fostering connections, and ensuring residents truly feel at home. And have you heard? We published a comprehensive report on just that: The 2023 State of Resident Experience in Single-Family Property Management. The report includes in-depth studies and impact data on the most innovative strategies in property management right now. In the meantime, we’ve curated the top 25 insights about resident experience from 20 experts in the property management industry. These pros have been there, done that, and seen it all. We’ve been fortunate enough to chat with them on podcasts, document detailed interviews, and have in-depth conversations across the country. Whether you're curious about the rise of resident benefits packages, seeking inspiration on innovative revenue streams, or want to learn more about property management automation and AI, read on to hear directly from the experts – or go directly to our in-depth, downloadable report. Why Focusing on Resident Experience is a Strategic Goal Centering your property management strategy on resident experience isn’t just a nice-to-have – it’s a strategic imperative that drives success and sets industry leaders apart. Here’s how… ‍ “Property Managers who are on the cutting edge realize that by focusing on the resident experience, they will earn better returns on investment for their investor clients.” -Gregg Cohen, Co-Founder of JWB Real Estate Companies ‍ “Resident retention is a direct reflection of your customer experience. If people enjoy working with you, they'll stay. If they don't, they won't. We use resident retention as a key benchmark for measuring our customer service. In our market, we renew 72% of our leases annually. A standard PM benchmark historically is that about a 70% renewal rate for residents is a huge success.” -Melissa Gillispie, Director of Leasing & Property Management at JWB Real Estate ‍ “As the operator of a business, how can I get from something transactional to something transformative – so that people are getting something from me that they aren’t getting from most other businesses.” -Jordan Muela, CEO of LeadSimple ‍‍‍ “We’ve really started to notice that the better experience we can make with the tenants, the more they want to come to us as opposed to our competitors. It's all about the experience. Think about Starbucks. It’s essentially the same cup of coffee as McDonald's. But it's the experience that Starbucks gives you. So we’ve held onto this idea that we want to provide the experience that residents gravitate to.” -Chenoa Stark, Property Manager at American Leasing and Management ‍ “When you're giving that great experience to your residents, you're also giving that great experience to your owners. They have less lost vacancy, they have more care and more respect given to their property, and that's going to protect their assets. That shift in the industry is already happening, and those that are able to make that pivot quickly are going to be able to level themselves up and really get ahead of the curve.” -Kelli Segretto, K Segretto Consulting ‍ “Happy residents stay longer, take better care of the home, and provide better long-term stability and return on investment for clients. They also spread the good word locally and refer more renters to you. And happy residents are usually nicer, leading to happier staff!” -Melissa Gillispie, Director of Leasing & Property Management at JWB Real Estate ‍‍ “When people come into my office and say this is the best experience I’ve ever had, I know we’ve done our job.” -Janet Sprissler, Broker/Owner, Rent 805 ‍‍ Changes in the Property Management Industry The evolution of the property management sector has been remarkable. Gone are the days of one-size-fits-all solutions and impersonal transactions. Today, as these insightful quotes highlight, the industry is transforming to meet the increasing demand for personalized, consumer-centric experiences that elevate convenience and satisfaction. ‍ “[W]e’re seeing a huge culture shift in the housing space. How do we provide ease? The Uber or Grubhub mentality of We want it now: How can you do that in the real estate space as well?” -Phil Vera, CEO of Paragon Property Management ‍‍ “I think ten years ago, property managers were only concerned with collecting rent and keeping tenants from doing damage to properties. It was a much more adversarial relationship than it is today. Today, the best PMs know that resident experience is vital to minimizing vacancy and creating a resident that strives to be a higher quality tenant.” -Jonathan Cook, Community Manager at APM Help ‍ “The younger generations we’re dealing with in property management, they want experiences and simplicity, and they’re willing to pay to have things taken care of for them.” -Eric Wetherington, VP of Strategic Initiatives, PURE Property Management ‍‍ “What I'm seeing from our residents – whether they're paying $3,000 a month in rent or $1,000 a month in rent – the number one thing that they look for is ease and convenience. They don't want complicated instructions. They just want simple, they want right now. They want contact-free, they don't want to talk to people. So everything we do from showings to move-in to the experience after they move in is all revolved around design for that expectation.” -DD Lee, PURE Property Management Why More Property Managers are Choosing a Resident Benefits Package (RBP) Professional property managers are increasingly adopting the multifaceted advantages of the Resident Benefits Package. The quotes below highlight why this holistic approach is rapidly becoming the gold standard in property management – emphasizing the RBP’s value for both residents and property owners alike. ‍ “A resident benefits package – you hear people call it the easy button. That’s because it is essentially all of these different services and all of these different, valuable add-ons for your residents that are done for you.” -Kelli Segretto, K Segretto Consulting ‍‍ “As RBP services have evolved to include more products and services – like credit building, identity theft, etc. – they are providing value that affects everyday people. I’ve found that, beyond helping us to stand out in our industry, an RBP means we're actually doing something good for the people that we interact with. It's not just about beating our competition, it's that we're actually providing value that they can really use – services that actually help them for their long-term goals.” -Chenoa Stark, American Leasing and Management ‍ “A resident benefits package alone can result in a 10% bump to revenue per unit, which can result in that 100% increase to profit per unit. This profitability can result in more fuel to your freedom, more fuel to your mission, and realizing all the things you went into business for in the first place.” -Daniel Craig, CEO of ProfitCoach Implementing an RBP Adopting a Resident Benefits Package might seem daunting, but as the insights below will reveal, it’s not as difficult as you might think. ‍ “The fear (that residents or owners will push back against change) is normal. No one ever wants to say, ‘Hey, you need to pay more money.’ I was the same. But I slowly introduced things like filter delivery, renter's insurance, and ancillary services. What I found was astonishing – nobody pushed back! Out of 300 residents at the time when we first started introducing this, maybe two or three asked, ‘Why why do I need this?’ And we simply explained to them, ‘This is going to make your life easier, and it's not going to cost much more than if you went to the store, spent all that time in the car, and bought it yourself. Plus, you might forget.’ It just made sense to them. Now, we sign residents up as they move in.” -DD Lee, PURE Property Management ‍ “Be ultra-transparent and get it done in the beginning, just saying, we're not hiding anything. This is what you're being enrolled in. This is what it is. I think that helped the adoption rate a little bit. And if people did call in with questions, we were happy to answer them and talk to them about it.” -Kyle Hendricks, VP of Hendricks Property Management ‍‍ Automation & AI in Property Management Leading experts emphasize the pivotal role of automation and artificial intelligence in reshaping the property management industry. Professional property managers are embracing these technologies not just to stay competitive but to elevate the overall resident experience and streamline operations. AI in property management is a big trend to watch. ‍ “People who are against automation say, ‘I don’t like automation because I lose that relationship with my clients.’ I would flip that and say: If I can automate eight of the ten tasks that need to be done, that means I have more time to build the relationships.” -Pete Neubig, CEO of VPM Solutions ‍ “Automation is the great equalizer. It allows us to compete with nationwide companies and to provide not only the same level of service but to be able to pivot and adapt much quicker than those larger companies can. If you're a smaller company, AI and Automation Tech is that equalizer that's going to allow you to shine just as well as these larger companies.” -Wolfgang Croskey, Founder & President of Crane ‍‍ “One of the things I want my clients to think about is that our tech is not just for our benefit. This is not just to make our lives easier and our jobs easier. It's to really be able to reposition our time so that we're focused on value creation.” -Rhianna Campbell, Property Management Consultant, Proper Planning LLC ‍ Innovative Revenue Streams & Ancillary Income By offering value-added services that residents genuinely need, property managers not only boost their profitability but also create a win-win situation where both parties benefit from added convenience and value. ‍ “Prop tech companies are making the mechanics of property management easy – rent collection, maintenance, screening, the day-to-day mechanics of property management. Thirty years ago, that’s what a property manager did. Now, though, when it comes to things like benefits packages, pet guarantees, and rent guarantees with security deposit alternatives, we can offer much more value.” -Todd Ortscheid, CEO of Revolution Rental Management ‍ “There are so many of these things – when you look through all of the different revenue-generating ideas – that are just good across the board for everybody. [The Triple Win] is where you should focus your efforts when you’re trying to bring in the most revenue and do the most good.” -Todd Ortscheid, CEO of Revolution Rental Management ‍‍ “When considering a service like pest control, our approach is, 'How can we take this off the property manager’s plate?’ We aim to create ancillary revenue for them, take an annoying task off their list, and enhance the resident experience.” -Landon Cooley, Co-Founder & CEO at Pest Share ‍ “Security deposits and tenant screening are two fascinating areas of real estate that tech companies are attempting to disrupt. Traditional security deposits are starting to become passé in some jurisdictions.” -Peter Lohmann, Co-founder & CEO of RL Property Management ‍ “I think the type of initiatives that we're having success with are those things that provide an enhanced lifestyle for our tenants or residents. And that's all often driven via surveys and input from residents. So instead of us pretending that we know every potential amenity they would like, we’re actually reaching out to them and asking them what the value proposition would be from their perspective.” -Steve Pardon, CEO of JMAX Property Management ‍ Hiring for Single-Family Rental Property Management (vs. Multifamily) Looking to hire this year? Single-family rentals have their own unique set of challenges and nuances that set them apart from multifamily units. Here’s a great tip from Matthew Whitaker to close us out. ‍ “When you add multiple investors and then the logistics of single-family, it becomes a much more complicated business. If you’re going to pull from the multifamily industry, you’re going to have to make sure that you’re hiring some of the best and brightest from that industry because, again, dealing with 300 homes and 50 investors is way more complicated than a 300-unit apartment community all together with one investor.” -Matthew Whitaker, Founder & CEO at Evernest ‍ Ready to Learn More? Wrapping things up, it's clear: nailing the resident experience is the secret sauce to elevating property management services and driving value for residents, investors, and your property management company. If you want even deeper insights into driving resident retention and investor value, check out our State of Resident Experience Report. The report deep-dives with studies on the value and impact of innovative property management services and explores the changing shape of the property management industry.

October 10, 2023

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9 Ways to Improve Your Resident Experience

Resident experience is the sum total of interactions and experiences a resident has with their property manager and the rental property itself – from the initial lease signing to the eventual move-out and all the day-to-day living moments in between. It encompasses everything from the quality of services provided, like timely maintenance and communication, to the overall livability and enjoyment of the property. In essence, it's how a resident perceives their rental journey in its entirety. Excellent resident experience management is the mark of a top-tier property management company. It boosts resident retention, satisfaction, and outcomes. In this article, we delve into nine actionable ways to enhance the resident experience in your single-family rental properties, fostering stronger relationships and, ultimately, achieving greater success in property management. Read the full report! If you haven’t already heard, we recently published our first-ever State of Resident Experience Report, which explores resident experience management: the pivotal touchpoints between a resident and a property manager. The report draws fresh insights from the SFR property management industry and explores the three top factors impacting resident experience right now. 1. A Seamless Move-In Experience Ah, the move-in process – the start of a beautiful friendship between the resident and the property manager. It's a bit like a first date – you're setting impressions that could make or break the relationship. A seamless move-in experience is your chance to roll out the red carpet for your new residents, showing them they've made the right choice (and have definitely swiped right on the best property around). And guess what? A resident who's had a great move-in experience is a happier one. Happier residents stay longer, pay on time, take care of the property, and make positive recommendations. Resident experience examples: How to build a perfect resident move-in experience Here's how to ensure your move-in experience hits all the right notes. Clear Communication: Provide detailed information about the new home and move-in process, including key collection, utility setup, and property rules. Who's handling utilities? Where's the best pizza joint nearby? Share all the important details. Welcome Packet: Roll out the resident red carpet with a welcome packet. Not only does it have all the must-know info, but it also says, "Hey, we're glad you're here." Include essential information such as garbage collection days, rules, important contact numbers, and a neighborhood guide. Property Readiness: Nothing dampens spirits like a flickering light on the first day. Ensure the property is thoroughly cleaned, all appliances are working, and any previous damages are repaired before the move-in date. Efficient Paperwork: Let's face it, nobody loves paperwork. Make it painless with easy online forms and digital sign-offs. Personal Touch: A little welcome gift can go a long way. It's like saying, "Welcome home, neighbor. We're going to rock this thing." Second Nature’s Resident Benefits Package includes a Move-in Concierge to ensure the process is seamless and personal. 2. Responsive Communication In the symphony of successful property management, responsive communication is your melody. It's the backbone of a harmonious resident experience, and when done right, it can elevate your property management status from “forgettable” to “virtuoso.” The sooner you respond to your resident’s queries or concerns, the more they'll feel valued. And a valued resident is a happier resident. Remember, good communication isn’t just about speed—it’s about clarity too. It's like being a great tour guide in the bustling city of property management—clear, informative, and always ready to help. Ways to improve communication with your residents Let's explore some best practices: Multiple Channels: Embrace the digital age! Offer various communication channels like emails, text messages, phone calls, and even a resident portal. Variety is the spice of life, right? Be Proactive: Don’t wait for your residents to reach out with issues. Regularly check in and ask if they need anything. Set Expectations: Be clear about your communication protocols. Let your residents know when and how they can reach you and when they can expect a response. No one likes to be left on read! Listen Actively: When your residents speak, lend them your ears! Show understanding and work collaboratively towards solutions. It's a two-way street, after all. Be Respectful: Always communicate with respect and professionalism. Treat your residents the way you’d want to be treated – it’s the golden rule, even in property management! 3. Better Maintenance Services with Quick Response Times Think of maintenance services as the superheroes of the property management world. When done right, they swoop in to save the day, ensuring minor issues don't escalate into supervillain-sized problems. Quick response times? That's your superhero's super speed. The quicker the response, the happier your resident, and the safer the day. How to improve maintenance services and response times Here's how to get your property management cape (sorry) flapping in the wind: 24/7 Maintenance Line: Offer a dedicated line for maintenance requests. To belabor our superhero analogy, it’s like having a bat signal for your tenants – they know help is just a call away. Online Reporting: Make it easy for tenants to report issues. An online system can keep things organized and ensures no request gets lost in the shuffle. Prompt Follow-up: Act swiftly on maintenance requests. Even if you can't fix the issue immediately, acknowledging the request and providing a timeline can ease the resident's mind. Regular Inspections: Regular property inspections can help you catch potential issues before they become major headaches. It's all about that ounce of prevention! Trusted Vendors: Work with reliable and professional vendors who provide quality work in a timely manner. They're your sidekicks in maintaining property harmony. 4. Resident Surveys and Active Feedback Gathering Resident surveys and feedback gathering are your property's annual check-up, a key health indicator for your relationship with residents. These invaluable tools allow you to take the pulse of resident satisfaction, uncover hidden issues, and celebrate what's working well. When residents see their feedback being valued and acted upon, it creates a sense of involvement and community, enhancing their overall living experience and driving resident retention. Importantly, active feedback gathering shows your residents that their voices matter. It instills a sense of ownership and care that can often lead to better property care and longer tenancies. How to turn resident feedback into a better resident experience Here are some ways to champion feedback in your property management: Regular Surveys: Don't just wait for the annual survey. Keep the feedback coming in regularly, like a monthly check-in or a quick poll after a service call. It's like catching up over a virtual cup of coffee – relaxed and informative. Feedback Boxes: Consider setting up a digital feedback box where residents can drop their thoughts, ideas, or concerns anonymously. Think of it as your modern suggestion box. Act on Feedback: Here's the real deal – taking action. Show your residents that their feedback isn't just being heard, it's being actioned. 5. Resident Rewards Resident Rewards are a huge factor in resident retention and satisfaction. Rewards make residents feel appreciated and have proven to incentivize habits like on-time payments and better care for the property. Perks like this can significantly boost resident satisfaction, increase lease renewals, and even stimulate referrals. It's a win-win all around! For multifamily and apartment community managers, that might look like community-focused programs. For single-family property managers, we’ve got some other tips. Second Nature’s Resident Benefits Package includes a robust resident rewards program. How to improve the resident experience with resident rewards Here's how you can sprinkle some rewarding magic into your resident experience: On-Time Rent Rewards: Create a system that rewards residents for consistently paying their rent on time. It could be a small discount or a gift card to a local coffee shop. Longevity Rewards: Celebrate lease renewals or long-term residents. A gift, a discount, or even a personalized note can make your residents feel valued for their loyalty. Referral Rewards: Turn your residents into ambassadors! Offer a discount or a bonus for any referral they make that signs a lease. Surprise Rewards: Keep the excitement alive with occasional surprise rewards. It could be as simple as a movie ticket or a voucher for a free car wash. 6. Incentive Programs Incentive programs are the next level of resident engagement that professional PMs offer. They can positively influence resident behavior, promote a sense of belonging, and even enhance your property's appeal to prospective residents. When residents feel that their good habits (like timely rent payments) are being recognized or they're being offered valuable services (like credit reporting or identity protection), it builds loyalty and satisfaction. It's like saying, "We're in this together, and we've got your back!" How incentive programs can boost the resident experience Here's how to serve up a great menu of incentives for your residents: Credit Reporting: Offer a program that reports timely rent payments to credit bureaus. It's a win-win: they pay their rent on time, and they build their credit! Identity Protection: In a world where digital safety is paramount, offering identity protection services can be a powerful incentive. It's like providing an invisible, protective bubble around your residents. Rent Discount for Referrals: Encourage residents to become your ambassadors. Offer a rent discount or a gift for successful referrals. It's like having your very own fan club. Early Payment Incentives: Reward residents who pay their rent well before the due date. It could be a small discount or a token gift, but it makes them feel appreciated. Rewards for Green Habits: Encourage residents to adopt environmentally friendly habits, like recycling or energy conservation, and offer incentives for their green efforts. This can really help in SFR when you don’t have the same level of control as PMs managing an apartment building. 7. Support Tools Support services work behind the scenes, often unnoticed, but they play a crucial role in streamlining the resident experience. From filter delivery subscriptions to online payments, these services add a layer of convenience and assurance for your residents. Integrating support services into your property management strategy can not only elevate resident satisfaction but also reduce your workload. It's like having a friendly assistant who's always ready to lend a hand, both to you and your residents. How to create support services that add convenience to your resident experience Here are a few ways you can amplify your resident experience through support services: Filter Delivery Subscription: Offering a filter delivery service for your residents ensures their HVAC system is always protected. It reduces your maintenance issues and costs and ensures they have a safe living environment. Second Nature’s filter delivery reduces resident and PM costs by hundreds of dollars a year. Online Rent Payment: Providing an easy-to-use online portal to process and automate rent payments and lease renewals adds a layer of convenience for you and your residents. Maintenance Request Portal: An online system for maintenance requests helps keep track of issues and ensures timely response. It's like having a 24/7 maintenance desk at their fingertips. Digital Notifications: Use email or SMS notifications to keep residents updated about important things like maintenance schedules, community events, or changes in property rules. Proptech solutions can help with digital support. Resident Portal: A comprehensive resident experience platform where tenants can access services, find information, and connect with management can significantly enhance the overall resident experience. 8. Concierge Services Concierge services are the above-and-beyond offerings that can truly set your property apart from the rest. This personalized attention can transform the often stressful processes into a smooth and enjoyable experience. How concierge services help with resident experience Here are some other examples of concierge services: Move-in Concierge: Who doesn’t want a personal assistant during the often chaotic time of moving? A move-in concierge helps with utility setup and pricing comparisons and provides local area information. Learn more about Second Nature’s Move-in Concierge in our Resident Benefits Package. Cleaning Services: Offering access to trusted cleaning services, whether for regular use or during the move-out process, can be a huge convenience. Maintenance Scheduling: A service to help residents schedule routine maintenance can keep their homes running smoothly without them having to worry about coordination. 9. Insurance While, as a property manager, you carry insurance for the physical property, it's equally important for your residents to have renter's insurance. Your coverage protects your owners' real estate investment. Renter’s insurance protects residents’ personal belongings and covers them for liability, and it's a small investment for significant protection. Plus, in case of a mishap, it can help the recovery process go much more smoothly. Resident experience examples: How to leverage a renter’s insurance program Here's how you can integrate insurance into your resident experience: Educate Residents: Make sure your residents understand the importance of renter's insurance, what it covers, and what it doesn't. This is critical information that every renter should know. Insurance Requirements in Lease: Include a clause about renter's insurance in your lease agreement. This helps to set the expectation right from the start. Annual Reminders: Send out annual reminders for policy renewals. It's a small step, but it ensures continuous protection for your residents. Renter’s Insurance Program: While most property managers require insurance, less than half of renters maintain coverage. Second Nature has developed a renter’s insurance program that has 100% compliance and leaves residents – and you – with the coverage they need. How SecondNature Improves Resident Experience Resident experience – those pivotal touchpoints between a resident and a property manager – can significantly shape the success of a single-family rental home. At Second Nature, we’ve built our entire company on the idea that resident experience can change the game in property management. Our Resident Benefits Package wraps up each of these strategies into an all-in-one resource for property management companies. It saves money for you and your residents and delivers the best in convenience and resident experience. Learn more about the Resident Benefits Package or read our State of Resident Experience Report.

July 18, 2023

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Why is Resident Experience Important?

Have you heard? We just published our first-ever State of Resident Experience Report! The report draws fresh insights from the SFR property management industry and explores the three top factors impacting resident experience right now. Download the report to see the results! In the meantime, today we’re getting started with a related topic: Why is resident experience so important? Resident Experience is the cumulative effect of all interactions and engagements between a resident and a property management company throughout their leasing lifecycle. It encompasses every touchpoint, from the initial viewing and leasing process all the way to maintenance services, communication, amenities, and lease renewal. In many ways, the resident experience is the heart of professional property management, encapsulating the quality of living provided beyond just a physical living space. In this article, we will: Explore the paramount importance of resident experience to property management Outline how it can directly impact factors like retention rates, profitability, and reputation Share insights from leaders in the single-family rental property management industry Buckle up as we delve into the power of stellar resident experience – and how it’s becoming a strategic imperative in the current real estate landscape. Here are 8 ways resident experience management can make a difference for residents, investors, and property management companies. 1. Improves Retention Rates Retention rates, or the ability to keep residents renewing their leases year after year, are a key metric of success for any property management operation. High retention rates mean stable revenue and reduced costs associated with vacancies, marketing for new residents, and turnover maintenance. But what fuels high retention rates? The answer is an exceptional resident experience & platform. When residents feel heard and valued, they’re a lot more likely to renew their leases. This positive resident engagement is just as important in single-family rentals as it is in multifamily apartment communities, where it often gets more attention. In essence, the resident experience is your tool to turn the transient nature of renting into a long-term relationship. It's not just about providing a day-to-day place to live; it's about designing a product and service that residents will pay for and stay for. A truly positive resident experience can convert short-term leases into long-term homes, making it a strategic focus for effective property management. “I think ten years ago, property managers were only concerned with collecting rent and keeping tenants from doing damage to properties. It was a much more adversarial relationship than it is today. Today, the best PMs know that resident experience is vital to minimizing vacancy and creating a resident that strives to be a higher quality tenant.” - Jonathan Cook, Business Development Manager, Revolution Rental Management 2. Reduces Vacancy Costs One of the most substantial costs that property managers (and their investor clients) face is the cost of vacancy. Each day a property remains unoccupied equates to lost revenue. Not to mention the additional expenses associated with marketing the property, move-out costs, screening new residents, prepping the move-in process, and preparing the unit for occupancy again. When you add it all up, the costs can be quite significant. This is basically the flip side of the coin of “resident retention.” Good resident experience → Resident retention → Reduced vacancy costs. A positive resident experience can act as a powerful retention tool, encouraging residents to renew their leases and reducing the churn that leads to vacancies. “We’ve really started to notice that the better experience we can make with the tenants, the more they want to come to us as opposed to our competitors. It's all about experience. We’ve held onto this idea that we want to provide the experience that residents gravitate to.” - Chenoa Stark, Property Manager at American Leasing and Management After all, happy residents can become your advocates. They are likely to spread the word about their experience, drawing in potential new residents. By delivering an exceptional resident experience, you're offering them just that, making your property stand out in a crowded market. 3. Increases Profitability “Property Managers who are on the cutting edge realize that by focusing on the resident experience, they will earn better returns on investment for their company and their investor clients.” - Gregg Cohen, Co-Founder of JWB Real Estate Companies. A compelling resident experience is a secret weapon for driving profitability in property management. It's like a strategic chess move that not only strengthens your relationship with residents but also contributes to your bottom line in several key ways. Reduced Acquisition Costs: We’ve already discussed how, by keeping your current residents happy and renewing, acquisition and move-in costs are drastically reduced. Increased Ancillary Revenue Opportunities: A positive resident experience can open the door to various ancillary income opportunities with strategic pricing. Services like an RBP can boost your profitability while simultaneously improving the resident experience. Word-of-Mouth Marketing: Satisfied residents are your best brand ambassadors. They can spread positive word-of-mouth about your property, attracting new prospects and reducing marketing expenses. Operational Efficiency: Elements that enhance the resident experience, such as digital communication portals or automated maintenance requests, also lead to operational efficiencies. These improvements can streamline and automate processes, saving time and reducing costs. In essence, a robust resident experience strategy is not just about resident satisfaction; it's a profitability powerhouse. It allows property managers to attract and retain residents more cost-effectively, uncover new revenue opportunities, and operate more efficiently, all of which positively impact the bottom line. 4. Boosts Reputation In the age of online reviews and social media, reputation is everything, especially in the property management industry. A strong, positive reputation can be one of your most valuable assets, attracting potential residents and providing a competitive edge in the market. The cornerstone of a great reputation? You know the answer already: An exceptional resident experience. When residents have positive interactions with your property management team, they're more likely to share their experiences. These shared experiences, whether through word-of-mouth or online reviews, contribute significantly to your company's reputation. Positive reviews can attract new residents looking for a new home, reducing the time and cost of filling vacancies. They also provide a form of social proof, assuring prospective residents that they're making a good choice by choosing your property. Furthermore, a stellar reputation can strengthen relationships with investors, vendors, and other stakeholders. It can lead to new business opportunities and partnerships, further boosting profitability. In essence, cultivating a superior resident experience is like planting the seeds of a robust, positive reputation. As you nurture these experiences, your reputation can grow, reaping benefits in terms of resident attraction and retention, stakeholder relationships, and overall business growth. 5. Simplifies Rent Collection Rent collection is a critical component of property management, and any strategy that can streamline and improve the efficiency of rent collection is worth its weight in gold. That's where a stellar living experience comes into play. Satisfied residents are generally more cooperative and timely in fulfilling their financial obligations, including paying rent. Positive relationships between residents and property managers foster a sense of mutual respect and understanding, which can go a long way in ensuring smooth rent collection. The resident experience also extends to tools and incentives for on-time rent payments. For instance, an easy-to-use online portal for rent payment can lead to faster, more reliable rent payments. One of the best ways to ensure on-time payments is by providing incentives in a Resident Benefits Package (RBP). An RBP can provide credit reporting for on-time payments, resident rewards for early payments, and more. A great resident experience doesn't just make residents happier; it makes the fundamental aspect of rent collection easier and more efficient. It's a testament to the idea that good relationships make good business sense. 6. Reduces Maintenance Issues Maintenance is a significant part of property management, and it can be a substantial cost center. However, by offering a superior resident experience, you can reduce the frequency and severity of these issues. Residents who feel taken care of are more likely to reciprocate those feelings towards the property. A positive resident experience can also foster better communication between residents and management. Residents are more likely to report minor maintenance issues promptly before they escalate into major, costly repairs. For instance, a leaky faucet reported and repaired promptly will cost much less than ignoring it until extensive water damage occurs. Again, one of the best ways to boost resident satisfaction and reduce maintenance costs is to provide a Resident Benefits Package. At Second Nature, our RBP provides things like scheduled filter delivery to ensure air filters are changed on time and reduce HVAC costs. The mantra is simple – take care of your residents, and they'll take care of your property. 7. Creates Satisfied Investors Property owners are investors who seek returns on their investments and the preservation of their properties' value. A vital element to achieving this is through offering an exceptional resident experience. When residents are satisfied, they tend to stay longer, pay rent on time, and take better care of the property. This leads to consistent income, reduced expenses, and fewer maintenance issues — all key elements for maintaining a property's value and ensuring strong returns. And remember: properties known for their superior resident experience tend to attract quality residents faster, reducing costly vacancy periods. They're also more resilient against market fluctuations, preserving investors' returns. Property investors value professional property management that focuses on resident experience because it signifies competent handling of their investment. It displays a forward-thinking approach that aligns with today's renter expectations. It leads to a virtuous cycle of high-quality tenancies, stable returns, and preserved property value – a “triple win” for residents, PMCs, and investors. “When you're giving that great experience to your residents, you're also giving that great experience to your owners. They have less lost vacancy, they have more care and more respect given to their property, and that's going to protect their assets. That shift in the industry is already happening, and those that are able to make that pivot quickly are going to be able to level themselves up and really get ahead of the curve.” - Kelli Segretto, Property Management Inc. 8. Builds Competitive Advantage “As the operator of a business, how can I get from something transactional to something transformative – so that people are getting something from me that they aren’t getting from most other businesses.” - Jordan Muela, CEO of LeadSimple In today's competitive property management landscape, offering an exceptional resident experience is not just a perk, it's a differentiator. It's what sets a property management company apart in a crowded market and makes it a preferred choice for residents. A positive resident experience leads to higher resident retention, reducing vacancy rates and the costs associated with acquiring new residents. It allows property managers to maintain steady rental income, creating a solid financial foundation that competitors might struggle to match. In a nutshell, a commitment to providing an exceptional resident experience can provide a significant competitive advantage for all the reasons listed above – positioning a property management company as a leader in the field. How Second Nature Helps Optimize Resident Experience Second Nature built a product based on the idea that creating a world-class resident experience could make a difference in profitability and value for residents, property managers, and property owners. We designed a fully managed all-in-one Resident Benefits Package that does just that. The RBP provides benefits, incentives, and concierge services that residents want to pay for and stay for. It drives up value for everyone involved and delivers a unique and elevated experience. “A resident benefits package – you hear people call it the easy button. That’s because it is essentially all of these different services and all of these different, valuable add-ons for your residents that are done for you.” - Kelli Segretto, Property Management Inc. Learn more about the Second Nature RBP, or dig into our 2023 State of Resident Experience Report.

July 18, 2023

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